Break Even

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Break Even

Break even is where firms total revenue is the same as its total costs, (In other words, money coming in = money going out). At the break even point, a firm is neither making a profit nor a loss.

Break even analysis is useful as a business can work out what volume of sales it needs to achieve to cover its costs. The key to break even is to work out the contribution made from the sale of each unit.The amount of money from each unit sold contributes to pay for the fixed and indirect costs of the business.

Break even…

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