Understand & Calculate Break-even Point for Hospitality

Understand & Calculate Break-even Point for Hospitality

What is the Breakeven Point (BEP)?

In accounting, the break-even point formula is determined by dividing the total fixed costs associated with production by the revenue per individual unit minus the variable costs per unit. In this case, fixed costs refer to those which do not change depending upon the number of units sold. Put differently, the breakeven point is the production level at which total revenues for a product equal total expenses.

As a simple equation it may be, practically its error-prone and very difficult to understand and interpret the results of break-even analysis. This course will explain the practical assumptions businesses need to make, sensitivity analysis of all assumptions, scenario planning to understand the impact of different business models.

We will also look at practical difficulties in calculating the breakeven points through a detailed model on the hospitality business. Though an example related to hotels, principals can be applied to all businesses.

Segregate Fixed and Variable expenses, understand optimal levels of business, Data driven re-structuring of business

Url: View Details

What you will learn

• fundamentals of breakeven points
• how to calculate breakeven points
• what are assumptions

Rating: 4

Level: All Levels

Duration: 1.5 hours

Instructor: Hotel Management School Your learning Partner