- 1). Launch Microsoft Excel.
- 2). Input "Fixed Costs" into cell "A1." Fixed costs are costs associated with the business that remain the same every month regardless of output. An example of a fixed cost is monthly rent.
- 3). Input "Selling Price" into cell "B1."
- 4). Input "Variable Costs" into cell "C1." Variable costs are costs associated with the business that change based on production. An example of a variable cost is the cost of materials used or cost of goods sold.
- 5). Input "BEP" into cell "D1."
- 6). Input the business's fixed cost in dollars into cell "A2." Input annual fixed cost to calculate an annual break-even point or enter monthly fixed cost to calculate a monthly break-even point.
- 7). Input the selling price of the item the business sells into cell "B2."
- 8). Input the wholesale cost or materials cost per item for the business into cell "C2." This is how much the business pays for each item sold.
- 9). Input the following formula into cell "D2" and press "Enter" to calculate the business's break even point:
=A2/(B2-C2)
This formula yields the number of units a business must sell to break even.
previous post
next post