# Break-Even Point (BEP)
The Break-Even Point is the level of sales at which the company earns No Profit and No Loss — i.e. total contribution exactly equals total fixed cost. It can be expressed either in units or in rupees (₹).
## Formulas
BEP in units:
$$\text{BEP (units)} = \frac{\text{Fixed Cost}}{\text{Contribution per unit}}$$
BEP in ₹ (amount):
$$\text{BEP (₹)} = \frac{\text{Fixed Cost}}{\text{P/V Ratio}}$$
Alternatively, BEP (₹) = BEP (units) × Selling Price per unit.
## Logic
To recover any cost, divide that cost by the contribution per unit — that gives the number of units whose contribution will exactly recover the cost.
## Extension – Sales Required to Earn a Desired Profit
When the question asks the sales required to recover Fixed Cost plus earn a target Profit:
$$\text{Units required} = \frac{\text{Fixed Cost} + \text{Desired Profit}}{\text{Contribution per unit}}$$
$$\text{Sales (₹) required} = \frac{\text{Fixed Cost} + \text{Desired Profit}}{\text{P/V Ratio}}$$