22.4 - Break-even Point Formulas
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Practice Questions
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What is the formula for calculating the break-even point in units?
💡 Hint: Think about how fixed costs and variable costs relate to each other.
If selling price per unit is ₹300 and variable cost is ₹200, what is the contribution per unit?
💡 Hint: Remember to subtract the variable cost from the selling price.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the formula for break-even in units?
💡 Hint: What do you divide to determine how many units you need to sell?
The contribution margin ratio (CMR) is calculated by dividing which two numbers?
💡 Hint: What two values do we need to find the ratio?
1 more question available
Challenge Problems
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A software as a service (SaaS) company has fixed costs of ₹80,000, a selling price per subscription of ₹400, and variable costs of ₹250 per subscription. Calculate the break-even point in units and sales value.
💡 Hint: Calculate units first, rounding as needed, then convert to sales value.
If a company expects to increase its fixed costs by ₹25,000 next year but also anticipates a 10% rise in selling price while keeping variable costs the same, how will it affect the break-even point?
💡 Hint: Consider how both changes affect profitability.
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