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🔴 2 Easy Steps: Break Even Analysis for Cost Volume Profit Analysis Tutorial

Clicked here and OMG wow! I’m SHOCKED how easy..

For instance you are an advertising executive and just after initiating your unique commercial, the sales of your cola drink jumps to $1 million dollars. Is that a decent outcome? Yes?

In fact, you definitely don’t know! What are the reasons? What if you exhausted $1 million dollars in advertising costs and also the ingredients and container of this cola soda also cost $1 million dollars, to find a total of $2 million? You will have earned $1 million dollars, but will have invested $2 million dollars on advertising in addition to “cost of goods.” Furthermore, one would still seek to join the expenses of the business enterprise like rent, salaries, etc.
Therefore, what quantity should your advertising grow sales before we are able to assume that the excess sales you observed from advertising is sufficient to at any rate pay for your complete costs and expenses? Maybe $2 million? $3 million? What quantity exactly?
This is actually the principle of “Break Even.” A corporation break even point is the precise amount of sales that you need in which the money may possibly be merely enough to pay for your costs and expenses. Whereas, a task’s (ex. An advertisement’s) break even point is exactly where the rise in sales added by way of the new undertaking is ample to fund the additional costs and expenses brought by that new scheme. Recognize that achieving break even does not mean you are receiving a profit though either; like I reported previously, it only means you find yourself making enough to pay for your costs and expenses.

Accordingly, so as to produce a profit, you’d need to 1) produce more sales so that you will go beyond the break even point, and/or 2) improve your merchandise’s “contribution margin.” Precisely what is contribution margin? It happens to be the difference between the price that you intend to deal in your merchandise and your “variable costs.” Variable costs are costs which aren’t “fixed” (fixed costs are things like fixed rent and flat compensations which may not climb regardless of whether you generate and/or sell more products or services). For this reason, contribution margin is different from “profit” for the reason that once we compute profit, we integrate fixed costs and overhead.

Cost Volume Profit Analysis, on the other hand, is definitely parallel to but bigger than Break Even Analysis, as it carries going more than just figuring out how much to sell with the intention to cover costs and expenses. With cost volume profit analysis, we likewise try to resolve how much we might sell if we want to reach a certain target profit, in which we take into account taxes as well.

breakeven, break even analysis, cost volume profit analysis, what is break even analysis

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44 Bình luận

  1. Darrina Acedo

    goooddd ty

  2. yeng 👽

    Thank you for this tutorial, it's really hard for me to understand math thing but this literally helps me a lot 😊🖤

  3. Ark Noah Pusag

    Yow hellow 2020, advance hello 2021

  4. Lipa Acharjee

    How to calculate break even Analysis in social media platform??

  5. Ace Gin

    now i understand it! ty man

  6. lakshman rao

    Thank you very much

  7. swagman

    thought u were trolling dude but man do i understand everything and u explain better than my teacher thx dude.

  8. Ally Mosha

    Best BEP tutorial i've ever listened n watch.. makes me forget the sound is aahhh!!

  9. Sreyphos Bun

    Do we need to minus Selling and administration expenses from Sell price ?

  10. Bonolo Malete

    Thank you so much

  11. Ahmed Amer

    Thanks so much Sir.

  12. SimsV

    Thanks.. I understood before the video was over… Even with bad sound quality..😂😂

  13. Maikl

    Thank you. T H A N K Y O U. Spell it right. T H A N K Y O U.

  14. Aayush Kumar

    Nice explanation sir

  15. Tinashe Katiyo

    yu make it easy thanx

  16. Kashyap Kumar

    Thanks sir

    From india

  17. Joy & Pain

    Thank you very much, i found this very simplest way to understand, i got it..

  18. Jet Yin

    Fuck those lectuers , always make it confuse and complicated ..Thanks for made this video .. i hate math !!

  19. Abhishek Mishra

    If I open a shop and I sell different kinds of products then how to find out

  20. The Hangry Lebanese Vlogger

    79 dislikes. What's wrong with you people. Click the like instead!!!!!

  21. fatemeh mirahmadi

    Thank u

  22. Dylan Alliata

    Thumbs up on this. I thought I would lose 15 minutes of my life learning this equation instead you taught it 7. Good work.

  23. Jalin Chinhema

    You are the best man…..Good explanation and now i have an idea

  24. Peter Deng Tiu

    Thank you so much!!

  25. Mr. J

    thumps up sir👍👍

  26. Akshay Soni

    Thannk you .it helps in bank exam life seat.

  27. its yobo55

    thank u very much for ur help

  28. JID 340

    in other words, the spread between sales and variable must equal fixed cost. 100=7x. thanks

  29. Shashi Singh

    Thank you man!

  30. MariaB

    Perfect, it FINALLY makes sense. Thank you !

  31. Valentine Okwudili

    So, I can say the $10 is my gross revenue or gross sales value. Will that be correct?

  32. paola

    Thank you so much!!!!!

  33. ArtByDNA

    awesome explanation. i love u

  34. Zain Zakaria

    is it the total variable cost we are using or variable cost of raw material per unit?

  35. Gopinath Marripati

    Very Nice…

  36. VipersBaneGames RUs

    Thanks dude.

  37. adam

    hey bro just wanted to ask is gross margin per unit and contribution per unit not the same thing?. p.s. love your vids keep up the good work

  38. German Estrelles

    The cost of all items sold by Guzmart office suppy during the month of june is 95,000.00. The overhead is 50,000.00. What is the breakeven point?

  39. Qayom Vajedi

    It was super lecture,I really appreciate it.Thanks for it.

  40. Vrushabh Bhaskar

    Informative! Enjoyed watching the video 🙂

  41. tl88

    thanks, your video help me a lot

  42. Zeex

    enough to understand

  43. Kaiming Song

    Selling price per unit(x) -fixed cost=cost per unit(x)
    This is an another method when you figure out the x you will get the break even point with unit
    Using the answer of x times the selling price per unit you will get the break even points with volume

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