时间:2023-12-22人气:作者:冰雪小鱼
The formula to calculation a Break Even price is as follows:
Break Even Sales Price = (Total Fixed Costs/Production Volume ) + Variable Cost per Unit
The break even price is the minimum price for your product that will cover your fixed costs at a specific volume of sales, according to Investopedia. The formula is:
Break Even Sales Price = (Total Fixed Costs/Production Volume ) + Variable Cost per Unit
Fixed costs are those expenses that must be paid, regardless of the sales volume. These include such expenses as rent, utilities, insurance, office salaries, licenses, accounting fees and advertising. These costs typically remain consistent regardless of manufacturing and sales volume, as well.
Variable costs are the costs to manufacture a product. These would include cost of materials, direct labor and supplies. As indicated by their name, these costs vary depending on the product and how it sells.
At a given price, a sales volume above the break even will produce a profit. This concept is best illustrated with an example.
The Hasty Rabbit Corporation makes sneakers for quick-footed rabbits and would like to introduce a new model called Swifty Feet. The corporate accountant has calculated the following costs:
For 50,000 pairs of sneakers:
Break even Sales Price = ($375,000/50,000 units) + $49 = $56.50
For 75,000 pairs of sneakers:
Break even Sales Price = ($375,000/75,000 units) + $49 = $54.00
For 100,000 pairs of sneakers:
Break even Sales Price = ($375,000/100,000 units) + $49 = $52.75
Note that the break even sales price declines as the production volume goes up. This is because the fixed costs get spread over a larger number of units, while the variable costs of manufacturing, $49 per pair, remains the same.
These variations in break even sales prices have implications for pricing strategies and the expected demand for the product at changing price points, according to North Carolina State University.
Understanding the relationship between sales volume and pricing enable marketers to plan pricing strategies and advertising campaigns. The break-even analysis shows the impact of changes in prices and sales on profits, according to the University of Michigan.
If fixed costs are rising, break-even analysis will show how much you will need to increase sales volume or raise prices to make up for the increase costs. It's important to perform this break-even analysis to keep a business running smoothly.
Calculating break even prices at different sales volume provides valuable insights about individual product profitability and sales strategies. In a fiercely competitive market, pricing at break even points can be used to discourage new entrants and drive existing competitors out of the market.
摘要:从物流公司的角度,由于经营问题被迫停业,实属无奈。"2023年的货代行业极为不易,在经济下行、客户拖欠运费、同行价格内卷等诸多因素下,一批中小货代倒下了。"近日,一物流公司
(675)人喜欢2023-12-25摘要:不过,不少卖家表示这在他们的意料之中,明年的平台费用整体仍在上涨。"继美国站之后,亚马逊欧洲站的费用也做了一些列调整,包括引入低量库存费、上调部分商品的月度仓储费。
(896)人喜欢2023-12-25摘要:据监测,“义乌·中国小商品指数”中小商品周价格指数本周为102.33点,环比上涨0.16点,网上交易价格指数、场内直接交易价格指数、场内订单交易价格指数环比
(845)人喜欢2023-12-25摘要:Shopee 以 78.3% 的收入占据市场份额第一(相当于 90.42 万亿越南盾)。在所有产品类别中,Shopee 的收入排名第一,远远领先于竞争对手平台。YouNet ECI 最近的一份报告指出,在
(973)人喜欢2023-12-25摘要:从物流公司的角度,由于经营问题被迫停业,实属无奈。"2023年的货代行业极为不易,在经济下行、客户拖欠运费、同行价格内卷等诸多因素下,一批中小货代倒下了。"近日,一物流公司
(675)人喜欢2023-12-25摘要:不过,不少卖家表示这在他们的意料之中,明年的平台费用整体仍在上涨。"继美国站之后,亚马逊欧洲站的费用也做了一些列调整,包括引入低量库存费、上调部分商品的月度仓储费。
(896)人喜欢2023-12-25摘要:据监测,“义乌·中国小商品指数”中小商品周价格指数本周为102.33点,环比上涨0.16点,网上交易价格指数、场内直接交易价格指数、场内订单交易价格指数环比
(845)人喜欢2023-12-25摘要:Shopee 以 78.3% 的收入占据市场份额第一(相当于 90.42 万亿越南盾)。在所有产品类别中,Shopee 的收入排名第一,远远领先于竞争对手平台。YouNet ECI 最近的一份报告指出,在
(973)人喜欢2023-12-25