The formula (Total fixed cost/Production unit volume) + Variable Cost per unit is used to get the break-even price.
=70+5=75
The break-even point (BEP) is the point at which total costs and total revenues are equal, or "even," in economics, business, and particularly cost accounting. Although opportunity costs have been paid and capital has received the risk-adjusted, projected return, there is no net loss or gain, and one has "broken even." In other words, all necessary expenses are covered, and neither a profit nor a loss is realised. The break-even point (BEP) or break-even level denotes the sales amount necessary to cover all costs, including both fixed and variable costs to the business, whether expressed in unit terms or revenue terms. At the break-even threshold, there is no overall profit. A company can only surpass the break-even point if its sales are at least as much as its costs.
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