Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 18

How is CVP analysis used to calculate the breakeven point for multiple products?

Step 1 of 2

The breakeven point is a point where forecasted revenue matches the estimated total costs. It is the quantity of output sold at which total revenue equals total cost. It is a point where there is no profit or loss. Breakeven point in the unit is arrived by dividing fixed costs by the contribution margin. Break-even revenue is equal to Fixed cost divided by contribution margin%.