The cost method of calculation does not take into account the economic and political situation in the world and its impact on product sales markets, the competitive environment, as well as the needs and demands of potential buyers. However, it allows you to determine the break-even point - the minimum cost of selling a unit of goods that will cover all costs associated with its production, distribution, sales and promotion.
Break-even point (or threshold) analysis is the most important stage of developing a pricing strategy. Its main goal is to calculate the minimum volume of product sales at which the manufacturer or seller works at zero - that is, fully covers the costs of creating (or purchasing) and selling goods. At this level of sales, the company will not make a profit, but will not work at a loss either.
After calculating the facebook database minimum sales volume, you can determine the break-even point for the cost of selling a unit of product - that is, the price of the product that will allow the company to cover all production and sales costs, but will not allow it to receive income from its sale.
The break-even point for sales volume is determined by the following formula:
Where:
Qbez. – break-even point for sales volume (pcs.);
Иусл.-пос. – conditionally fixed costs of the enterprise (rubles);
P – selling price of one unit of goods (rubles);
Iusl.-per. – conditionally variable costs of the enterprise per unit of goods (rubles).
Let's consider the implementation of a pricing strategy based on the break-even point using a specific example: Zvezda LLC purchases and sells 2,000 units of goods every month. The purchase price of one product item is 700 rubles. The company's monthly fixed costs are 280,000 rubles. The company's conditionally fixed costs are 280,000 rubles - they remain unchanged, despite the purchase volume. The company's conditionally variable costs are equal to 700 rubles. The cost of purchasing products is related to variable costs, because this indicator changes depending on the volume of the purchased product.
Let's calculate the minimum price for a product using the formula, based on the break-even point of sales volume:
2,000 pcs. = 280,000 RUB / (P – 700 RUB)
(P – 700 rub.) = 280,000 rub. / 2,000 pcs.
(P – 700 rub.) = 140 rub.
P = 840 rub.
Thus, the minimum selling price at which the company will not make a profit, but will fully cover all costs of purchasing and selling products, is 840 rubles.
Let's check the calculated indicator:
the company's conditionally fixed costs are equal to RUB 280,000 for 2,000 units of products for sale;
conditionally variable costs – RUB 1,400,000 (2,000 units * RUB 700) for 2,000 units of goods;
full cost price – RUB 1,680,000 (RUB 280,000 + RUB 1,400,000);
revenue from the sale of 2,000 units of products at a price of 840 rubles per unit - 1,680,000 rubles;
the profit (or loss) from the sale of 2,000 units of products at a price of 840 rubles per unit will be 0 rubles (1,680,000 rubles – 1,680,000 rubles).
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