Break-even point, calculating

In the example above the contribution margin is 1,000 sales price minus the 700 variable cost or 300. This is the denominator in the break-even point calculation. This is shown in the equation below ... 

To calculate the break-even point for x, we need values for ... 

Pricing and output, and calculating the break-even point. 

Calculate the break-even point for this operation. 

Due to the drastic fall in the price of tungsten, almost all MEC mines were closed. Figure 13.3 presents the price of tungsten for the period from 1960 to 1996 while the dates of important mine closures are indicated. This diagram is also of special interest because in some cases it allows a rough calculation of the break-even point of the mines. Mittersill mine is excluded from these examples, because its excellent economy is based on full integration from the mine to highly pure W and WC powders, while Panasqueira mine s special economy is due to the presence of Sn in the ore. 

Costs are related to material prices, output speeds, wastage, machine depreciation, downtimes, etc. (see below). Depending on the choice of material, blister packs of the push-through variety can be as economical as glass bottles in quantities up to around ninety items per pack. At quantities below twenty-five items, there are positive cost advantages in most cases. Both these comments must be accepted as rather general statements—the actual break-even point has to be calculated for each set of circumstances. The above indications assume that both a glass bottle and the blisters have to be packed into cartons, with a CRC fitted to the bottle pack. 

Often to analyze the impact of decisions, companies calculate the break-even point to produce a product. The break-even point is the production level where the volume of sales pays both the fixed costs and the variable costs of producing that product. If the total revenue and total costs were graphed, the breakeven point is where these two lines intersect. Of course this intersection is where the number of sales (i.e., total sales revenue) equals the total expenses. 

The break-even point is calculated by setting the total cost (TC) equation equal to the total revenue (TR) equation ... 

A common example of this occurs daily at the famous widget company. Assume that you work for the famous widget company and everyone is trying to buy your widgets. Just to be sure that you are making money on them at the current price you decide to calculate the break-even point for your widgets. To... 

The utilization degree where the production costs reach the revenues is the break-even point (for the given example shown in Fig. 5.5.5 65%). For projects with a certain risk of investment, the break-even point should be less than 70%. For detailed calculation of the influence of the utilization degree on the production costs, the assumption of a linear relationship between variable costs and utilization should no longer be used, and we obtain cost curves such as shown in Figure 5.5.6. 

Bond SA is planning to manufacture a new product with an initial sales forecast of 3,600 units in the first year at a selling price of 800 each. The finance department has calculated that the variable cost for each truck will be 300. The fixed costs for the manufacturing facility for the year are 1,500,000. Using the information provided by the sales forecast and the finance department it is now possible to calculate the planned profit, the contribution and the break-even point for this venture by leveraging the nature of fixed and variable costs. 

Several factors need to be considered when looking at the number of cavities required under more general conditions. If a fairly accurate estimate can be made of cycle times and mould costs, and assumptions made as to the running cost of the machine without material, then a break-even point can be calculated which can then be compared with the... 

The Internal Rate of Return (IRR) is the equivalent interest rate at which the Net Present Value of the acquisition would be zero. Given the projected total cost of the system, and the projected total benefits of the system, both projected back (discounted) to today, it is the interest rate that the investment could sustain and still just break even. Since firms, in general, operate at a point where their incremental cost of money is equal to its incremental earning power, any investment that returns an IRR better than the cost of money is a good investment. Traditionally, the IRR is found by calculating the NPV with different interest factors in a trial and error method until the interest factor is found which drives the NPV to approximately zero. 

On the other hand, since chemical products are differentiated by their performance specification, a new product will be governed by its own supply and demand equilibrium, and there will be no guarantee that a new chemical product can be sold at any price. There is no point in trying to calculate the return on investments (a cash flow transient) if the business proposition is not profitable in the steady state, i.e., with investments ignored. Hence before a prospective manufactmer considers whether the investment is justified by its return, ongoing profitability must be assessed first. This is typically a calculation of the market size that must be achieved for revenue to cover fixed costs, a situation referred to as break-even . [15]... 

Some conditions require breaking up the exchanger into multiple parts for the calculations rather than simply using corrected terminal temperatures. For such cases one should always draw the q versus temperature plot to be sure no undesirable pinch points or even intermediate crossovers occur. 

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