- Home
- Industrial Engineering
- Production Planning and Inventory Control
- Inventory Control
- Break Even Point Analysis

At break even point slope of sales line is equal to

This question was previously asked in

VIZAG MT Mechanical: 2015 Official Paper

- \(\frac{{Variable~Expenses\;+\;Constant~Expenses}}{{Total~Sales}}\)
- \(\frac{{Total~Sales}}{{Total~Expenses}}\)
- \(\frac{{Total~Sales\;-\;Profit}}{{Variable~Expenses\;+\;Profit}}\)
- \(\frac{{Variable~Expenses\;-\;Constant~Expenses}}{{Total~Sales}}\)

Option 1 : \(\frac{{Variable~Expenses\;+\;Constant~Expenses}}{{Total~Sales}}\)

**Explanation:**

Breakeven analysis is used to find the minimum level of production required. It evaluates both fixed and variable costs.

A breakeven analysis is used to determine how much sales volume your business needs to start making a profit, based on your fixed costs, variable costs, and selling price.

Break-even analysis consists of:

- Fixed cost (F)
- Variable cost (V)
- Sales revenue (S)

\(BEP = \left( {\frac{F}{{S - V}}} \right)\)

From the diagram, the slope of the sales line at BEP will be given by,

\(Slope~of~sales~line =\frac{{Total~Cost}}{{Total~Sales~at~ BEP}}\)

At BEP, **Total cost = Fixed cost + Variable cost**

\(Slope~of~sales~line =\frac{{Variable~Cost\;+\;Fixed~Cost}}{{Total~Sales~at~ BEP}}=\frac{{Variable~Expenses\;+\;Constant~Expenses}}{{Total~Sales}}\)

Free

ST 1: Logical reasoning

5361

20 Questions
20 Marks
20 Mins

India’s **#1 Learning** Platform

Start Complete Exam Preparation

Daily Live MasterClasses

Practice Question Bank

Mock Tests & Quizzes

Trusted by 2,31,60,852+ Students

135 Total Tests 13 Free Tests

Start Free Test
131 Total Tests 20 Free Tests

Start Free Test
Testbook Edu Solutions Pvt. Ltd.

1st & 2nd Floor, Zion Building,

Plot No. 273, Sector 10, Kharghar,

Navi Mumbai - 410210

[email protected]
Plot No. 273, Sector 10, Kharghar,

Navi Mumbai - 410210

Toll Free:1800 833 0800

Office Hours: 10 AM to 7 PM (all 7 days)