Breakeven Selling Price C Iowa State University（保本销售价格C 爱荷华州立大学）.pdf

File C5-202 April 2007 /agdm Breakeven Selling Price omputing the breakeven selling price for your product is an important calculation when setting your sale price. It tells you the minimum price you can sell your product for and still cover your costs. The breakeven sale price should be computed over a range of production and sale quantities using the C formula below. Breakeven Sale Price = Total Fixed Cost + Variable Cost per Unit Volume of Production First you need to categorize your costs into the managerial cost categories of fixed and variable. A key con- cept in this formula is the fixed cost per unit of sales. Because total fixed costs are constant regardless of the volume of production, the fixed cost per unit of production drops as volume increases, as shown below. Then divide the total fixed cost by the volume of production to calculate the fixed cost per unit of production. Total Fixed Cost Volume of Production Fixed Cost per Unit $100 divided by 50 equals $2 $100 divided by 25 equals $4 $100 divided by 20 equals $5 $100 divided by 10 equals $10 Next add the fixed cost per unit to the variable cost per unit to compute a total cost per unit. This is your breakeven sale price.