Breakeven analysis is a tool used to calculate the number of products you will need to sell to breakeven or recover the variable and fixed costs associated with creating your product. In addition to the fixed and variable costs associated with production, breaking even is highly dependent upon the product’s price per unit and project sales of the product.
Not only is performing break even analysis useful in identifying the point at which you can start to generate a profit, but it is also helpful in identifying appropriate price points and production budgets for your product. Consider the following resources to help you perform a break even analysis for your business:
1. Talk to an accountant about breakeven analysis.
2. Get Internet assistance in finding the breakeven point for your business.
3. Evaluate usefulness of accounting software to conduct analysis of breakeven point.
Get break even basicsTurning a profit is the goal of most business owners. A breakeven analysis is a great tool to help you forecast profits based on possible product costs and unit prices. Finding break even point is a key factor in most business plans because without the analysis it is difficult to identify how you can attain profitability.
Use online breakeven analysis calculatorsBreakeven analysis is a widely used accounting formula. Break even calculators can be used to perform what if scenarios and help you evaluate how previous year fixed and variable costs and unit prices has affected or will affect your current year break even point. You can find various online resources to help you quickly determine your company breakeven point.
Case Western Reserve University offers an interactive online breakeven analysis calculator. KJE Computer Solutions has an online break even analysis calculator designed to help you quickly learn the number of units you will need to produce to reach a profit.
Download accounting software for breakeven analysisBreak even analysis software provides businesses with detailed instructions on how to obtain breakeven point and analyze their progress in attaining a profit. Breakeven point software includes easy-to-follow reports doe novice to intermediate users.
DIY Management Consulting sells a break-even analysis tool designed to help businesses in performing break even analysis. downloadsoftware4free.com offers a downloadable break-even analysis tool specially designed for small business owners.
- It is a good idea to perform two break even analyses. One breakeven analysis should use per-unit sales and costs assumptions while the other analysis should use break even figures derived from actual sales and profits forecasts.