Page 33 - Cost Accounting - Ready Reckoner
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Break Even Point (B.E.P):
The point where there is no profit or no loss. At B.E.P Contribution = Fixed Cost
hence the profit is nil.
B.E.P (in ₹) =
/
At B.E.P, Contribution = Fixed Cost
Sales x P/V Ratio = Fixed Cost
Sales =
/
B.E.P (in units) =
/
At B.E.P, Contribution = Fixed Cost
No. of units x Contribution/ Unit = Fixed Cost
Thus, no. of units sold =
/
Margin of Safety (M.O.S):
That level of sales at which an organization makes profits.
M.O.S = Present Sales – Break Even Sales (or)
/
At B.E.P, the entire fixed cost is recovered. Thus, after B.E.P Contribution = Profit
Sales x P/V Ratio = Profit
Thus, Sales (M.O.S) =
/ 
