The breakeven analysis formula states that S (sales price) = F + V + P. When using the breakeven analysis as a starting point for product pricing, "P" is a variable component in the equation. What does "P" stand for?

Question

Quizplus · Accepted Answer

Profit. The breakeven analysis formula states that S (sales price) = F (fixed costs) + V (variable costs) + P (profit). Since it is a variable component in the equation, incremental profit can be built into the starting point for pricing a product.

The Breakeven Analysis Formula States That S (Sales Price) =