Cost-Volume-Profit analysis 本量利分析

Sales volume to achieve a target profit= (Fixed cost+ Target profit) /Contribution/unit

BEP in units

=Fixed cost/ (Contribution per mix)

Contribution per mix= Contribution/unit of A *no. of units of A + Contribution/unit of B *no. of units of B

BEP in sales $

=Fixed cost/ (Average C/S ratio )

Average C/S ratio= (Selling price of A * no. of units of A + Selling price of B * no. of units of B)/(Contribution/unit of A *no. of units of A + Contribution/unit of B *no. of units of B)

If the mix shifts towards products with lower contribution margins, the BEP in units will increase.