Changes in modern lifestyles, particularly in urban areas, have driven an increasing demand for services that can support time efficiency and convenience in daily activities. One form of service that is increasingly needed is laundry services. This occurs in line with increasingly busy people's routines, where household chores such as washing clothes are no longer a top priority, but are instead delegated to professional service providers. This phenomenon has also driven significant growth in the small and medium enterprise (SME) laundry sector, which has mushroomed in various areas, including densely populated residential areas, city centers, and university campuses [1]. Laundry services offer the convenience of washing dirty clothes. Business opportunities for laundry services are growing, even in almost every region, given that washing clothes is a basic need for every individual [2].

However, with the increasingly rapid development of the laundry business in Indonesia, business owners are required to have the ability to adapt to every change that exists in order to maintain income stability and laundry business actors face challenges that are not simple [3]. Increasing competition is reducing profit margins, especially for small businesses without robust financial management systems. One of the most fundamental challenges faced by SME laundry operators is pricing their services. Setting prices that are too high can result in customer loss, while setting prices that are too low can lead to financial losses due to the inability to optimally cover operational costs. Meanwhile, price and product quality are categories that assess consumer attitudes regarding price. Quality, on the other hand, is also a product assessment based on consumer perception, which is the attitude of the product itself [4]. In this context, an analytical approach is needed to help business owners determine rational, competitive, and profitable prices. One approach often used in cost- and production-volume-based pricing decisions is Break-Even Point (BEP) analysis [5].

(Litamahuputty et al., 2022) In his research, he explained that Break-Even Point (BEP) analysis is the point at which total revenue equals total expenses or costs incurred to produce goods or services. Break-Even Point (BEP) analysis studies the relationship between fixed costs, variable costs, profits, and sales volume. Break-Even Point is an important concept in financial management and managerial accounting that refers to the break-even point, which is a condition where total business revenue equals total costs incurred. Determining BEP allows managers to evaluate the minimum sales level required to keep the business operating without experiencing losses. At this point, the business experiences neither profit nor loss, and also allows business actors to know exactly at what sales volume their business begins to generate profits [7].

Mulyadi (2015) in [8] states that the break-even point (BEP) is a condition in which a business neither earns a profit nor suffers a loss. This means that a business is said to be at the break-even point if the amount of revenue is equal to the amount of costs, or a condition where the profit is only enough to cover all fixed costs. BEP analysis is a method for determining the lowest sales volume so that a business does not suffer a loss and does not earn a profit. By understanding the break-even point, business owners can develop pricing strategies and sales volumes needed to maintain the business's sustainability. In practice, BEP analysis is very relevant for service businesses such as laundries, which have a combined cost structure between fixed costs such as rent, permanent employee salaries, and machine depreciation; and variable costs such as detergent, water, electricity, and piecework wages [9].

According to [10] In analyzing break-even, including calculating and collecting the calculated figures, break-even analysis establishes certain conditions. If these conditions do not exist in reality, they must be created or assumed to exist as required. So, if the conditions do not exist, they can be assumed to exist.

In the context of Duta Laundry, a small and medium-sized enterprise (SME) providing laundry services by the kilo in urban areas, break-even analysis is a crucial tool for supporting business sustainability. This business operates in a competitive market, where consumers have a wide choice of service providers at varying price points [11]. However, until now, Duta Laundry has never used the Break Even Point (BEP) analysis method to determine the feasibility of the set service price or to evaluate the level of sustainability of its business. Instead, in determining the price of Duta Laundry services, it uses market research methods on service providers in the surrounding area. This is important because BEP is a very useful analytical tool for determining the break-even point between total revenue and total costs, and helps entrepreneurs in making strategic decisions for long-term business continuity. Therefore, decisions regarding pricing cannot be made haphazardly or based only on estimates, but must go through careful calculations based on real business operational data. Duta Laundry needs to understand how much operational costs per month, how many customers must be served at a minimum to avoid losses, and what the ideal service price is to cover all costs and provide adequate profit [12].

In contrast to previous research such as (Santika et al., 2024) which only calculates BEP based on financial reports without linking it to pricing strategy or service efficiency, this study integrates BEP calculations with the actual daily service volume, and reviews the specific cost structure of laundry services by the kilo. In addition, this study also expands the scope by comparing financial performance between months (May–June), to identify the dynamics of business feasibility in practice. From a strategic management perspective, BEP analysis also provides benefits in helping business owners design short- and medium-term financial projections. By knowing the break-even point, Duta Laundry can set realistic service volume targets, as well as design promotional and cost-efficiency strategies. For example, if the break-even point requires 500 kilograms of laundry per month to achieve cost-revenue balance, then operational and marketing strategies need to be directed to achieve or exceed that volume. Thus, BEP analysis is not only relevant for determining service prices, but also serves as a reference for designing a more measurable overall business management system.

Break-Even Point (BEP) is an analytical technique in managerial accounting that aims to determine the point at which a business experiences neither profit nor loss. BEP occurs when revenues equal costs, both fixed and variable. In the context of micro-enterprises like Duta Laundry, managerial accounting is crucial for developing cost planning, pricing services, and evaluating business performance through a data-driven approach. One of the key tools in managerial accounting is Break-Even Point (BEP) analysis, which is used to determine the break-even point and assists in decision-making regarding contribution margins and minimum sales volumes to avoid losses.

According to [14] managerial accounting is not only limited to recording transactions, but also focuses on cost analysis and financial planning that support short-term and long-term strategic decision-making. One tool frequently used in managerial accounting is Break Even Point (BEP) analysis, which allows management to determine the minimum sales limit to avoid losses. Managerial accounting is an information system designed to provide financial and non-financial information to management in order to support effective and efficient internal decision-making. In the context of micro-enterprises such as Duta Laundry, managerial accounting plays a crucial role in presenting relevant data regarding cost structures, cost of services, and profitability analysis to support business sustainability.

Although Break-Even Point (BEP) analysis has been widely discussed in various previous studies, most studies still focus on general break-even point calculations based on periodic financial reports, without integrating daily operational variables or considering fluctuations in service volume in micro-enterprises in the service sector, particularly laundry by the kilo. These studies also rarely link BEP analysis results to specific pricing strategies based on cost characteristics and consumer behavior in highly competitive markets. Furthermore, few studies utilize BEP as a tool for dynamically evaluating business sustainability by comparing financial performance across periods on a monthly scale. Therefore, this study presents a novelty by combining BEP calculations based on actual financial data and daily service volume, conducting a comparative analysis of inter-monthly performance, and directly linking the results to recommendations for pricing strategies, cost efficiency, and realistic service volume targets. This approach is expected to provide practical contributions for micro-enterprises in the laundry sector while enriching the literature on cost management in service businesses in Indonesia.

The urgency of this analysis is further strengthened by the fact that many SMEs in the laundry sector still set prices based on market trends or follow competitors without data-driven calculations. Such practices are highly risky and can lead to long-term losses, especially when operational costs increase unexpectedly. Furthermore, customers are increasingly price-sensitive, so pricing must truly reflect the value of the service provided. Therefore, the Break-Equivalent (BEP) analysis approach is a relevant and necessary option in the context of increasingly fierce business competition and the need for high cost efficiency.

The purpose of break-even analysis is to determine the level of activity at which sales revenue equals the sum of all variable and fixed costs. If a company only has variable costs, then the break-even point problem will not arise. The break-even point problem will arise if a company has both variable and fixed costs. The total amount of variable costs will fluctuate according to changes in production volume, while the total amount of fixed costs will remain unchanged even if there are changes in production volume [15].

Therefore, this study will analyze the cost structure of Duta Laundry, calculate the break-even point based on actual financial conditions, and evaluate the feasibility of the current service pricing. The results of this analysis are expected to provide constructive input for more professional pricing decisions that are oriented towards business sustainability. Furthermore, this study can also contribute to the development of academic literature on the application of cost management concepts in the SME service sector in Indonesia.

The purpose of this study is to analyze the application of the Break Even Point (BEP) method in determining the feasibility of service prices and evaluating the sustainability of micro-enterprises in the Duta Laundry business unit, as well as providing data-based strategic recommendations to Duta Laundry owners so they can determine competitive and profitable selling prices. In the realm of managerial accounting and service business strategy, this objective is very significant because it touches on aspects of data-based decision-making that can increase efficiency and profitability. This objective is in line with the importance of integration between cost management and service volume as a key element in achieving economic efficiency in micro-enterprises.

This research uses a qualitative descriptive approach, which is deemed appropriate for depicting the actual operational conditions of Duta Laundry in depth. This approach not only allows researchers to systematically describe phenomena but also explore the business owner's perceptions, strategies, and managerial considerations in managing costs and determining service prices. The advantage of qualitative methods lies in their ability to capture operational dynamics and decision-making processes that are difficult to measure with quantitative data alone. This research was conducted from March to May 2025 at the Duta Laundry business unit, located in a densely populated area, specifically on Jalan Jemadi, Pulo Barayan Darat II, Medan Timur District, Medan City, North Sumatra. The location was selected purposively based on the business's characteristics, which met the criteria for Micro, Small, and Medium Enterprises (MSMEs), and ease of access for primary data collection.

Data collection was conducted through written interviews with the owner of Duta Laundry as the primary informant, direct observation, and documentation. The owner was selected as an informant because he possessed comprehensive knowledge of the cost structure, pricing strategies, and business objectives. To maintain data transparency and validity, the interview instrument was structured with a question guide that focused on three main aspects: (1) cost structure, (2) production and service volume, and (3) pricing policy. This guide helped keep the interview process focused, while still allowing informants to provide more detailed explanations based on their experiences.

The data obtained was explained through three stages: (1) data reduction, by selecting relevant information from interviews and documents that focused on cost structure, production volume, and pricing policy; (2) data presentation, in the form of a descriptive narrative supplemented with tables or matrices to clarify the cost structure and the potential application of Break Even Point (BEP) analysis; and (3) conclusions and verification, to identify the credibility of not using BEP to stop the business and potential strategies if this method were implemented.

In addition to qualitative analysis, this study also employed BEP calculation as a supplementary analysis method. The formula used is:

This study demonstrates the importance of implementing Break Even Point (BEP) in strategic decision-making for micro-enterprises, particularly in the service sector, such as laundry by the kilo. Duta Laundry, despite demonstrating positive operational performance in terms of service volume and revenue, has not yet integrated a BEP-based managerial analysis approach in pricing and evaluating cost efficiency.

In theory, BEP is a very important analytical tool in managerial accounting because it helps business owners identify the point at which total revenue equals total costs, encompassing both fixed and variable components [23]. BEP also serves as a basis for cost-based pricing, investment decision-making, and operational efficiency evaluation [24]. In the context of Duta Laundry, the calculation results show that the break-even point occurs at 107 services or 749 kg of laundry per month, with a minimum revenue value of Rp2,675,000. With a realized volume of 600 transactions (4,200 kg), this business is already in a financially profitable condition.

However, the implementation of BEP was only carried out experimentally through this research and not as part of the internal financial management system [17]. Integrating BEP into managerial accounting systems can strengthen cost control mechanisms, increase operational efficiency, and enhance resilience against market demand fluctuations and rising input costs elements that are critical for micro-enterprise sustainability. From the perspective of earnings management theory, such integration allows owners to proactively manage revenue and expense recognition to maintain target profitability levels, while still complying with ethical and regulatory standards.

Furthermore, data from May and June 2025 highlight significant efficiency dynamics. In May, despite relatively high revenue of Rp17,351,000, excessive variable costs per unit (Rp22,640) resulted in a loss of Rp710,000 because the company had not yet reached BEP. Conversely, in June, cost efficiency was achieved by reducing variable costs to Rp12,500, allowing BEP to be achieved with only 188 services, and the realization of 485 service units resulted in a profit of Rp3,710,000. These results align with the findings of [20], which state that cost efficiency is directly proportional to profit growth in micro businesses. Strategically, this reflects the competitive advantage model for UMKM, where efficiency not only increases short-term profitability but also sustains long-term market competitiveness.

This finding is further reinforced by research [22] on the laundry business in Mataram, which emphasizes that BEP implementation is key to maintaining businesssustainability, setting fair prices, and responding adaptively to operational cost fluctuations. Study [19] and [18] also supports the importance of improving service quality to retain customer loyalty and strengthen market positioning. In the context of Duta Laundry, maintaining service quality—through punctuality, employee courtesy, and consistently clean laundry has proven more effective than indiscriminate price reductions, which may erode profit margins [25].

Beyond short-term financial outcomes, BEP analysis also provides a framework for strategic planning. With a clear understanding of the break-even threshold, Duta Laundry can evaluate expansion opportunities such as opening new branches, hiring additional employees, or diversifying service offerings. As supported by [14], transitioning from intuition-based to data-driven decision-making empowers micro-enterprises to navigate competitive pressures and volatile cost structures with greater agility.

Ultimately, the managerial accounting perspective applied in this study positions BEP not merely as a financial calculation tool, but as an integral component of strategic management. When combined with deliberate cost efficiency measures and informed by earnings management and competitive strategy theories, BEP serves as both a profitability safeguard and a roadmap for sustainable business growth in dynamic market environments.

Based on the research results, it can be concluded that the application of the Break Even Point (BEP) analysis method in the Duta Laundry business provides a clear picture of the minimum revenue limit and service volume that must be achieved to cover all operational costs. Previously, Duta Laundry set a service price of IDR 25,000 for every 7 kilograms of laundry based on standard market prices, without considering comprehensive internal cost calculations. Using the BEP approach, it was found that the business would reach the break-even point at a service volume of 107 transactions or the equivalent of 749 kilograms of laundry per month. The minimum revenue that must be achieved to avoid losses is IDR 2,675,000 per month.

In fact, the actual volume achieved by Duta Laundry is 600 transactions or approximately 4,200 kilograms of laundry per month, meaning the business has significantly exceeded the break-even point and is in a profitable financial position. This indicates that operationally, the business has strong financial potential if managed with sound efficiency principles. Comparing financial performance between May and June reinforces the importance of BEP analysis in supporting managerial decision-making. In May, although revenue reached Rp17,351,000, high total costs of Rp18,061,000 caused the business to incur a loss of Rp710,000. Conversely, in June, cost efficiency was successfully improved so that with revenue of Rp12,125,000 and total costs of Rp8,415,000, Duta Laundry was able to achieve a net profit of Rp3,710,000. These findings are clear evidence that efficient cost management and analytical calculation-based planning such as BEP are crucial for maintaining business sustainability and profitability.

However, this study is not without several limitations. One limitation is the observation period, which was limited to only two months, namely May and June, so it cannot provide a comprehensive picture of the business's financial condition on an annual scale. Furthermore, the cost variables in this study were assumed to be constant, even though in reality, the prices of raw materials such as detergent, water, and plastic packaging can fluctuate. This study also used only one analytical approach, namely the Break Even Point (BEP), without combining it with other financial analysis methods such as contribution margin or profitability ratios.

Research implications: The findings of this study provide practical guidance for micro-enterprises, particularly in the service sector, on how BEP analysis can be applied as a decision-making tool to determine optimal pricing strategies, evaluate cost efficiency, and plan capacity utilization. From an academic perspective, this study enriches the discussion on the integration of managerial accounting tools in micro-business contexts, demonstrating that simple yet systematic analytical approaches can significantly improve financial sustainability. Furthermore, the results offer empirical support for theories of cost efficiency, earnings management, and competitive strategy in UMKM, highlighting that data-driven planning not only safeguards profitability but also strengthens long-term competitiveness in fluctuating market environments.

Based on these results and limitations, recommendations for future researchers include extending the analysis period to a full year, allowing for a more objective view of the dynamics of cost and revenue fluctuations. Furthermore, a combination of analytical methods, such as contribution margin analysis, sensitivity analysis, and other financial ratios, is recommended to obtain more comprehensive evaluation results. Future research could also consider external factors such as seasonal demand trends, the level of competition in the local market, and the impact of inflation on cost structures and consumer purchasing power. Therefore, this research is expected to serve as a starting point for introducing the Break Even Point (BEP) analysis approach to micro-enterprises and encourage more measurable and data-driven financial management in service businesses like Duta Laundry.

THANK-YOU NOTE

The author would like to express his sincere gratitude to all parties who contributed to the completion of this research. Special thanks go to the management and staff of Duta Laundry, who provided valuable data, insights, and cooperation throughout the research. He also thanks his supervisors for their constructive input and guidance throughout the research and writing process. He would also like to thank the reviewers and editorial team for their time, expertise, and suggestions to improve the quality of this article.