Implementation of Break Event Point Analysis and Margin of Safety in Profit Planning

: The break event point is a certain amount of production that the company must achieve to reach the break-even point (no profit and / no loss). Margin of safety is the amount of production required so that the company does not suffer losses. The determination of the margin of safety is closely related to the break event point, where the margin of safety is at one level above the break event point in terms of determining the minimum sales required. Both of these are some of the instruments that can be used to plan profits. The purpose of this study was to determine the application of break event point analysis at PT. Beton Jaya Manunggal, knowing the application of margin of safety analysis and to determine profit planning at PT. Jaya Manunggal Concrete. This study uses a non-statistical quantitative approach. The data used in this study is secondary data through PT. Manunggal Jaya Concrete in 2014-2018. The analysis method uses the least square method to plan the net profit of PT. Beton Jaya Manunggal in 2019 with reference to the net sales plan. The result of this research is the break event point of PT. Beton Jaya Manunggal in 2014 – 2018 showed a positive trend with the break event point being above the current year's production during 2015 – 2016. Margin of safety PT. Beton Jaya Manunggal in 2014 – 2018 showed an upward trend with negative margins throughout 2015 – 2016. Profit planning using least squares with reference to net sales planning is quite accurate considering that there is only a difference of 2% above net sales recorded in the 2019 financial statements. Net profit PT. Beton Jaya Manunggal was recorded in 2019 at 1.3 billion Rupiah so that profit planning was not carried out based on the consideration that the recorded profit was less or showed a downward trend when compared to the net profit trend in 2014 – 2018.


Introduction
The industrial sector plays a key role as an engine of development because the industrial sector has several advantages over other sectors because of the very large capitalization value embedded, the ability to absorb a large workforce, as well as the ability to create value added from each input or basic material used. processed. In developing countries, the role of the industrial sector also shows a higher contribution.
The existence of industry in Indonesia in addition to the country's economic growth also has the initial goal of establishing the industry itself, namely achieving profit targets for the industry. Profit achievement can be realized if the industry also plans to target sales volume. Business activities have a goal that always leads to the level of profit so that it can be used as a source of funds for survival in meeting the needs of the industry itself. When the profit received has reached the target, of course the development of the industry is getting stronger with fairly tight competition among other industries, this can allow the industry to become a market leader and expand or expand the industry.Conversely, if the industry does not achieve the desired profit, then the industry will experience losses.
Factors that affect profit are the selling price of the product, operating costs, and sales volume. Operating costs determine the selling price to affect sales volume. Sales volume affects production volume and production volume affects costs incurred.
These three factors are interrelated with each other. Therefore, in a business it is necessary to have a good plan regarding the relationship between costs, volumes and profits because these three elements have a very important role in achieving business success. One of the cost-volume-profit analysis techniques that can be used is break even point analysis. Break even point analysis is a tool or technique used by management to determine a certain level of sales in a business so that it does not experience a profit and does not experience a loss (Sigit Suhardi, 2002). Break-even is a condition in which a business has the same total income as the total cost (Supriyono, 2002). A break-even state occurs when the sales of a business are only sufficient to cover the costs incurred by the business when producing a product. The costs in the break even point analysis consist of fixed costs and variable costs. These costs are costs that are used as the basis for determining the break-even point of a business.
Through break-even analysis we will be able to find out how the relationship between fixed costs, variable costs, the desired level of profit, and the volume of activity (sales or production). Based on the pattern of behavior, costs are grouped into fixed costs and variable costs. Fixed costs are costs that are fixed or do not change over a certain period of time, regardless of the company's sales or production, such as rent and insurance costs. Meanwhile, variable costs are costs that in a certain time range and the amount varies proportionally, such as direct wages and raw material costs. If an industry/organization only has variable costs, then there will be no break event point problem in that industry/organization. By analyzing the break event point, management will obtain information about the Margin of safety (safety margin).
Understanding the level of security or Margin of safety is the relationship or difference between certain sales (according to the budget) with sales at the break-even point. That is, a safe limit used to find out how much sales are budgeted to anticipate a decline in sales so as not to experience losses. (Kasmier, 2017). One of the plans made by management is profit planning.
Profit planning includes the steps that will be taken to achieve the desired profit target in a business. Therefore, profit planning is influenced by sales planning and cost planning (S. Munawir, 2007). Break event point analysis provides management with information on the relationship between costs, volumes and profits, making it easier for them to analyze the factors that influence the achievement of operating profits in future.
PT. Betonjaya Manunggal, Tbk or is one of the companies engaged in the plain concrete iron industry which is listed on the Operating profit margin measures the profit generated purely from the company's operations without looking at the financial burden (interest) and the burden from the government tax (earnings before interest and tax / EBIT).

Research Results and Discussion
Condition of Break Event Point (BEP) of PT. Beton Jaya Manunggal  sales. The margin of safety ratio is important to use in production planning so that the company knows how much production is needed to achieve a safe ratio.
The margin of safety ratio is assumed that the higher the ratio, the higher the sales effort needed to break even where the company does not suffer losses, and vice versa. On the other hand, a high margin of safety can be interpreted as the efficiency of selling a product on realized sales. This study found the results of the calculation of the Margin of Safety as follows:  Profit planning is the steps taken by management as a reference to achieve a certain amount of profit in a production cycle. Profit planning, in the analysis is influenced by two factors, namely sales and costs. (Munawir, 2007). Profit planning used at PT.
Beton Jaya Manunggal in this study will focus on the results of the calculation of break even points and margin of safety where the variables outside the two variables are considered constant (carteis paribus) to estimate profits in 2019, which are as follows:

Financial Statements of PT. Beton Jaya Manunggal in 2019
Based on data from the annual report of PT. Beton Jaya Manunggal in 2019 can be seen several points as follows: 1. Net Sales recorded 122,320 Million Rupiah (122,320 Billion Rupiah).

Profit Planning
Profit planning is the development of a plan of an operating plan in order to achieve the goals and objectives of the company.
Profit is important in planning because the main goal of a plan is satisfactory profit. A budget is a plan that is stated financially and quantitatively. The profit plan of a company consists of a detailed operating budget and budgeted financial statements. (Carter K. Wiliam, 2019)

Break Event Point Analysis
Break Event Point analysis is a method used by company leaders to find out or to plan on the volume of production or sales volume whether the company in question does not make a profit or does not suffer a loss. By knowing the break-even point, it is possible to plan the levels of production volume or sales volume that will bring profits to the company concerned. In order to avoid losses, the company must be able to work on the number of sales at the break-even point. If the sales volume does not reach the break-even point, it means that the company will suffer a loss (Jumingan, 2006).

The Role of Break Even Point on Profit Earning
Break

Margin of Safety
Margin of Safety is the relationship between budgeted sales volume and sales volume at the break-even point. If the sales volume at the break-even point is known, and then linked to the budgeted sales, it will be possible to know the safety limit, namely how much the sales volume may decrease as long as the company does not suffer losses. The difference between the budgeted sales volume or a certain level of sales with the sales volume at the break-even point is the Margin of Safety.

Conclusion
Based on the research findings above, the following conclusions were found: