## Methods to Calculate Break Even Point in Sales ($) Value:

* Break even point in sales ($) value* may be calculated in two ways but both give the same answer:

### (1) Formula:

*Contribution ratio* is calculated as:

Contribution ratio may be improved by:

- Increasing the sale price.
- Reducing the variable costs.
- Switching production to products with higher contribution rate.

### (2) Formula:

Break-even point in value may also be calculated as:

## Solved Example:

A company has a product, which is sold @ $21 per unit. The per unit variable costs are $14. Fixed costs are $0.70 per unit at the budgeted production level of 300000 units.

**Required: **

What is the break even level in units and sales revenue?

**Solution:**

To read another solved example, click target profits page. On this page solved example 2 is relevant to this article.