Breakeven analyst this is the point in which revenue or savings from the program

Question

Breakeven analyst this is the point in which revenue or savings from the program equals the cost of the program the one time the company has broken even on the cost of the training.
formula equal break-even Point equal cost / savings * time
* time is the period of time in which the return is being calculated if annually then 12 months.

a. a program has an annual cost of $70,000 and is expected to generate in return a savings of $80,000. when would the break-even point occur given study savings and costs?

Explanation / Answer

The Annual cost of the program = $70,000

The Savings = $80,000

Break-even point = (cost/savings) * time = ($70,000/$80,000)*12

= 10.5

This is the point of revenue is in balance with the expenditures of the organisation.

Hence Breaekeven = 10.5

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