- April 27, 2021 at 11:04 am #618964jkalouMember
- Topics: 2
- Replies: 1
Dear tutors, i would like to ask about the non industrial cost (either variable or fixed).
How are they being calculated in order to find the BE?
Lets say i got a production of 1000 units
Industrial variable 1000 euros
Non industrial variable 170 euros
Industrial fixed 600 euros
Non industrial fixed 900 euros
Sales 850 units
As i searched accross the internet could not find any diversification on non-industrial and industrial costs?
Should the BE be calculated on sales point (850) or on production point (1000)
Is it correct to calculate as industrial + non indu. variable costs as 170/850 + 850April 27, 2021 at 3:06 pm #618986John MoffatKeymaster
- Topics: 56
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You should have watched our free lectures on CVP analysis instead 🙂
The breakeven point is the total fixed costs (€1,500) divided by the contribution per unit.
However you have not given enough information in the question because although we can calculate the variable cost per unit ( (1,000 + 170) / 1,000 ) we do not know the selling price in order to be able to calculate the contribution.
Breakeven is not calculated on the current sales or on the current production.
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