In economic theory and practice, the term break-even chart is often used. It clearly demonstrates the income from production and sales, which covers all costs. This schedule can be calculated when the costs are constant.
Instructions
Step 1
The first break-even chart was laid out in 1930 by Walter Rautenstrauch. This type of planning is called the critical production schedule (break-even schedule). In economic theory, production costs (costs) are constant and variable. To build a break-even chart, only fixed costs are taken. To begin with, two coordinate axes are displayed. The X-axis displays costs, and the Y-axis superimposes the production quantity. In classical economic theory, with an increase in the amount of production at an enterprise, the amount of costs proportionally increases.
Step 2
When building a schedule, prices for materials and products in general are unchanged over a certain period. Sales happen evenly according to plan. When the volume of production and sales changes, variable costs do not change. In order to build a break-even chart, you need to draw three lines on the chart. Fixed costs (FIC) are plotted parallel to the output volume axis. The gross cost (VI) line grows with variable costs. Gross cost (GV) is the sum of fixed and variable costs. The next line is sales revenue (BP).
Step 3
At the intersection of sales proceeds and gross (total) costs, a break-even point (K) appears. The break-even point shows the company zero profit without costs. Correctly constructing a break-even schedule will allow the company to correlate all costs and income from product sales. Using the break-even chart, you can calculate an accurate forecast of enterprises and its main indicators.
