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How do you reduce the break-even point?

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Question ajoutée par Rehan Qureshi , Financial Consultant , Self Employeed
Date de publication: 2014/01/10
Rehan Qureshi
par Rehan Qureshi , Financial Consultant , Self Employeed

Ways to reduce a company's break-even point include1) reducing the amount of fixed costs,2) reducing the variable costs per unit---thereby increasing the unit's contribution margin,3) improving the sales mix by selling a greater proportion of the products having larger contribution margins, and4) increasing selling prices so long as the number of units sold will not decline significantly.

Mohammed Hussain Shah
par Mohammed Hussain Shah , Finance Manager , Al-Naba Contracting Co. Ltd

1. By reducing fixed costs,

2. By reducing variable cost per unit,

3 By increasing sales price without a corresponding increase in variable cost.

Mohammad Tohamy Hussein Hussein
par Mohammad Tohamy Hussein Hussein , Chief Executive Officer & ERP Architect , Egyptian Software Group

By reducing the unit cost.

Jose Miguel Lucas Martins
par Jose Miguel Lucas Martins , IT Director - Robotic Process Automation (RPA) , Novo Banco

2 options:

1) Reduce your ammount of fixed costs

2) Increase you operational margin

 

As both options are not mutually exclusive, the best is to pursue both (objectives) at the same time

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