Capital conservation point formula is:

1, capital conservation point sales? = total fixed costs ÷ (product unit price - unit variable cost)

And because: unit price - unit variable cost = unit contribution to the gross profit then, the above formula can be written as: capital conservation point sales = total fixed costs ÷ unit contribution to the gross profit.

2, break-even point income? = total fixed costs ÷ (1 - variable cost rate)

Which, variable cost rate = (unit variable cost ÷ unit price) × 100% unit variable cost = (unit price × variable cost rate) × 100%.

3, (the production of a single product company) capital conservation point sales? = fixed costs ÷ gross contribution margin.

4, (the production of a variety of products enterprise) capital conservation point sales? = fixed costs ÷ weighted average contribution margin.

Calculation of the conservation point, we assume that the unit price, fixed costs, unit variable costs, many factors remain unchanged, but coupled with this state of affairs balance can not be maintained for a long time.

1, the impact of price changes on the conservation point

Changes in selling price per unit of product is an important factor affecting the conservation point. In the profit and volume chart (also known as the critical profit and loss chart or profit and loss balance chart), based on a certain cost level, the higher the selling price per unit of product, manifested in the "gross sales revenue line" the greater the slope, the lower the point of preservation, so that the same amount of sales to achieve the more profit, or less loss.

2, the impact of changes in unit variable costs on the capital conservation point

The new variable cost line slope is greater than the slope of the original variable cost line, so that the capital conservation point has increased, the production and operation of the corresponding reduction in profitability; Conversely, the level of the capital conservation point correspondingly reduced.

3, the impact of changes in fixed costs

Because of the increase in fixed costs, the total cost of goods sold line shifted upward, so that the point of preservation has increased, the production of profitability is reduced accordingly; fixed costs are reduced, the total cost of goods sold line shifted downward, the preservation of the point of preservation of a corresponding decrease in the profitability of the increase.

4, the composition of product varieties change on the impact of capital preservation point

When the enterprise produces a variety of products at the same time, due to the profitability of different products are usually different, therefore, the composition of product varieties change, will change the weighted average contribution of the enterprise gross profitability, so that the enterprise's capital preservation point of the corresponding changes.