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total cost = total sales revenue
By adding up fixed and variable cost and if the income goes above this point the firm starts making profit.
Break-Even point = Total Fixed costs / Unit Contribution Margin
The Break-even point is the point where total Contribution Margin equals Fixed Costs.
Unit contribution margin = selling Price - Variable cost ( DM + DL + V. OH + V. S&A)
Fixed Costs = F. OH + F. S&A
by dividing the company's total fixed expenses by the contribution margin ratio.
The contribution margin ratio is the contribution margin divided by sales (revenues)
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