Accounting Break Even Formula

Given below formula to calculate break even based on the fixed costs, depreciation, price per unit and variable cost per unit. Accounting break even formula is defined as (C + D) / (P - V) Where, C = Fixed Costs, D = Depreciation, P = Price Per Unit, V = Variable Cost Per Unit. Add the fixed costs and depreciation value, then subtract the variable cost per unit from the price per unit. Finally, divide the first obtained value by the second one. The resultant value is the break even.


Accounting Break Even Point = (C + D) / (P - V)


C = Fixed Costs
D = Depreciation
P = Price Per Unit
V = Variable Cost Per Unit

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Accounting break even point helps to identify the maximum amount of profitability generated from the company and also to find the amount of loss to be sustained when the business sales turn down.

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