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How do you calculate the break-even point in terms of sales?

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posted Jul 28 by Nway Nadar

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1 Answer

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The break-even point in sales can be calculated by dividing a company's fixed expenses by the company's contribution margin ratio.

The contribution margin is sales minus variable expenses. When the contribution margin is expressed as a percentage of sales it is referred to as the contribution margin ratio. (When we use the term "fixed expenses" we mean the company's total amount of fixed costs plus its fixed expenses. When we say "variable expenses" we mean the total of the company's variable costs plus its variable expenses.)

answer Jul 31 by Debolina Charaborthy
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