# How to Calculate Break Even Point?

How do you find breakeven point?

## Breakeven Point Calculation

Breakeven point is the term widely used in Finance to analyse the point
at which the total expense of a company equals the total revenue. Use
our simple step by step tutorial and learn how to calculate break even
point.

**Break even point Formula**

**Break even point = Fixed cost / Gross Profit Margin**

Gross Profit Margin = Sales price - Variable cost

**Step 1:**

Assume,
XYZ company is selling tv at a fixed cost of Rs. 65,000 per month.
Sales price and variable cost of the company is Rs.2000 and Rs.500
respectively. Find the break even point?

Fixed cost - Rs. 65,000

Sales Price - Rs. 2000

Variable Price - Rs. 500

**Step 2:** We have to find the Gross profit margin cost.

Gross Profit Margin = Sales price - Variable cost

=2000 - 500 = Rs. 1500

**Gross Profit Margin = Rs. 1500**

**Step 3:** To find the Break even point of the company, substitute the obtained values in the formula.

Break even point = Fixed cost / Gross Profit Margin

=65,000 / 1500

Break even point = 43

Thus, the company has to sell 43 TVs to cover their total expenses, fixed and variable cost.

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