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Interactive Break Even Point Calculator
In this section, you can compute Break Even Point (i.e. zero profit point) interactively using simple BEP calculator program that I made. Input the Variable cost per unit, Fixed cost and Product cost per unit. Then you click the "Compute BEP" button to obtain the Break Even Unit and Break Even price. If you are not sure about the meaning of these terms, read previous section.
The program will not only compute BEP, but also do optimization similar to goal seek that I explained in the previous section. The optimization part below will inversely compute back the input costs, given the output of Break Even Unit and Break Even price. You set the value of either Break Even Unit and Break Even price and then find out what is the variable cost per unit or fixed cost or product price that will give that your preset BEP. This is similar to the Goal Seek in Spreadsheet but much simpler usng this we site. To maximize your profit, you need to reduce your fixed cost and put most cost on the variable cost.
Play round with this program and you will learn BEP through enjoyable experience. Don't forget to bookmark this site as you may need to come back again in the near future. Please also visit my other tutorials and other interactive programs.
- Goal Seek Tutorial
- MS Excel Tutorial index
- Kardi Teknomo's Tutorial
- Maket Basket Analysis
- Insightful Financial Education
Preferable reference for this tutorial is
Teknomo, Kardi. (2010) Determination of product price based on Break Even Point.http://people.revoledu.com/kardi/tutorial/Finance/BreakEvenPoint/