BreakevenAnalysen

BreakevenAnalysen, commonly referred to as break-even analysis, is a managerial accounting technique used to determine the sales volume required to cover total costs, yielding zero profit. It helps assess profitability, set pricing, plan budgets, and evaluate the viability of products or projects.

The analysis rests on fixed costs, which do not vary with output, and variable costs, which do. The contribution margin per unit is price minus variable cost per unit, and the break-even point can be expressed in units or in currency. Formulas are: break-even in units = fixed costs / (price per unit - variable cost per unit); break-even in revenue = fixed costs / contribution margin ratio.

More advanced applications include cost-volume-profit analysis for single products or portfolios, multi-product break-even using weighted average contribution margins, and sensitivity analysis to explore changes in prices, costs, or volumes.

Data requirements include reliable cost data, pricing, and forecasted sales. Limitations include the assumption of linear cost behavior, constant prices, and that capacity constraints or reallocations are not considered; it also ignores non-financial factors.

Applications include evaluating product launches, pricing strategies, and capital investments; the method helps set profitability targets and assess risk. It is often used in budgeting, strategic planning, and early-stage viability assessments.

Example: if fixed costs are 100,000, price per unit is 50, variable cost per unit is 30. Contribution margin per unit is 20. Break-even in units = 100,000 / 20 = 5,000 units. Break-even revenue = 5,000 × 50 = 250,000. A forecast of 6,000 units yields a margin of safety of 1,000 units.