To establish the price of one or all the services we take into consideration the well-established technique of break-even point (BEP) or break-even point. This method is used to evaluate the relationship between variable and fixed income and costs.

Given a certain number of services provided, we can determine at what price level we reach fixed and variable costs coverage. Likewise, on the other hand, a price (for example that of the competition), we can determine which quantity of services will have to be paid and sold at certain cost levels.

**The breakeven point (BEP) is represented by that total revenue volume that equals total costs.**

If we want to know the break-even point relative to the quantity of services that must be sold, at a certain price level, to cover all costs (fixed and variable) it is possible to use the following formula:

**BEP = Fixed Costs / Unit Price - Variable Cost (unitary)**

We hypothesize that the Sport Ideal programs a cost of gymnastics for the elderly, with a unit price per lesson of €. 10 (if we take the other forms of price policy that we have analyzed, it is clear that formula is always the same), a variable unit cost of €. 4 and fixed costs for a whole year of €. 2,500. From these data we obtain:

2.500 / 10 - 4 = 416

The break-even point is represented by 416 lesson units that will have to be sold in a year, at that price to cover the total costs, below we would be in the sphere of losses, above in the sphere of profits.

If we divide the 416 units by a hypothetical number of users, suppose 15, we obtain the 28 lessons that represent the minimum number to be seen. Each subsequent lesson is profit, to each customer in a year.

From this it is possible to derive different stratewgies of the price to be offered to consumers

If the 28 lessons multiply them by €. 10 we get €. 280 is the minimum annual fee, from where a percentage of revenue to be applied can be applied, to identify an annual price that gives the sport center a profit and the customer a reason for expediency.

Another application of the break-even point is that of turnover, to calculate independently the units supplied and sold the turnover necessary to cover the total costs (fixed and variable) we use the following formula:

**F = fixed costs / % contribution margin**

The contribution margin indicates the percentage of disposable income to cover fixed costs and achieve a profit after deducting the variable costs.

**Si ricava in questo modo:**

% MC = 10 (hypothetical unit price) - 4 (unit variable cost) / 10 (unit price)

**The percentage of the contribution margin is 60%**

Turnover = 2.500 / 60 * 100 = 4.166.67

The amount of turnover needed to reach total cost coverage

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