BREAK EVEN FORMULAS: 5.5 IB BUSINESS MANAGEMENT

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5.5 break even formulas

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12 Terms

1
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Break even quantity

fc/ sp - avc

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contribution per unit

price per unit - variable cost per unit

3
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total contribution

total revenue - total variable cost

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total contribution

contribution per unit * number of units sold

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profit

tc - tfc

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break even point

fc - contribution per unit

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margin of safety

current output - breakeven output

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total revenue

p * q

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total costs

tfc + tvc

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p * q is the same as

tfc + tvc

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target profit output

fc + target profit/ contribution per unit

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break even revenue

fc/ contribution per unit * price per unit