1. ang electronics, inc., has developed a new dvdr. if the dvdr is
Next, it is important to establish how much profit is made from each unit sold as this will be used in the calculation of the break-even point. This can be done by subtracting all variable expenses related to production (such as materials and direct labor) from the revenue generated per unit sold. Lastly, divide your fixed costs by your per unit profit margin to obtain your break-even amount – this will indicate how many units need to be sold in order for all associated expenses with that particular project to be covered.
For example, if you have $50,000 worth of fixed costs and a profit margin of $10 per unit then you would need 5000 units in order to break even ($50,000/$10). As long as you can sell more than that number then you can expect a positive return on investment over time assuming all other variables remain constant.