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Measuring Improvement in Break Even Point

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Break-even Analysis
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Pete, US

Measuring Improvement in Break Even Point

If one compares the break even point over 2 different time periods for the same entity, but on different cost structures (variable and fixed), and different sales, how do you measure improvement in the break even point?
 

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0
shoakat, UK
 

BEP

I think BEP should only relate to fixed costs as the idea is once they have been recovered, each additional unit of output is generating extra income. Different sales figures are irrelevant in terms of variable costs however with each additional unit of output would reduce fixed cost per unit.

 
0
Alpin McGregor
freeelance, United Kingdom
 

Break Even Point

Break even point is calculated at a moment in time. It does not cover several periods. If you recalculated break even point at some other time then the improvement will be indicated by a lower break even point. This will have occurred because of one or a combination of the following changes. Selling price has been increased, unit variable cost has decreased, fixed costs have decreased. If break even point is higher (ie deteriated because you need to sell more to break even) then the opposite of the above will have occurred. I think what you are really looking for is the answer supplied by sensitivity analysis.

 

More on Break-even Analysis:
Summary
Discussion Topics
topic Time after Break-even Point?
topic How to Calculate BEP Without Price Given?
topic Break Even Point formula for a service industry
topic Break Even Analysis and Cost Benefit Analysis
topic Breakeven Point Calculation
topic Further Limitations of Break Even Analysis
topic Not enough revenues...?
topic Time for break even..
topic Break-even Point Example
topic Break Even Point Calculation of a Bank
topic Breakeven Formula for Services
topic Contribution in Break-even Point
👀Measuring Improvement in Break Even Point
topic BEP Calculation Possible with Multiple Products?
topic How to Deal with Owners Withdrawals in Break-even Analysis?
topic BEP Useful for New / Start-up Businesses
topic Could There Be 2 or even more Break Even Points?
topic Cost of Idle HQ Staff Included in Break-even Point Calculation?
topic Break-even Point Analysis when Material Prices Fluctuate
🔥 Break-even Point as Maximum Revenue
topic How to Account for Interest in Break-even Point Calculation?
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More on Break-even Analysis:
Summary
Discussion Topics
topic Time after Break-even Point?
topic How to Calculate BEP Without Price Given?
topic Break Even Point formula for a service industry
topic Break Even Analysis and Cost Benefit Analysis
topic Breakeven Point Calculation
topic Further Limitations of Break Even Analysis
topic Not enough revenues...?
topic Time for break even..
topic Break-even Point Example
topic Break Even Point Calculation of a Bank
topic Breakeven Formula for Services
topic Contribution in Break-even Point
👀Measuring Improvement in Break Even Point
topic BEP Calculation Possible with Multiple Products?
topic How to Deal with Owners Withdrawals in Break-even Analysis?
topic BEP Useful for New / Start-up Businesses
topic Could There Be 2 or even more Break Even Points?
topic Cost of Idle HQ Staff Included in Break-even Point Calculation?
topic Break-even Point Analysis when Material Prices Fluctuate
🔥 Break-even Point as Maximum Revenue
topic How to Account for Interest in Break-even Point Calculation?
Special Interest Group

SIG Leader

Do you know a lot about Break-even Analysis? Become our SIG Leader

Knowledge Center

Break-even Analysis
Knowledge Center



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