Graphical Presentation of Break-even point

 

In the above graph, X-axis shows units being sold and Y-axis shows the revenue made. The cost line shows the total cost that occurs during the production process, the fixed cost line shows the occurrence of fixed costs, and the revenue line shows the total sales being made. The intersection of the revenue curve and cost curve determines the break-even point; i.e., point E.


Break-even Analysis: Importance, Uses, Components and Calculation

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What is Break-even Analysis?

Break-even Analysis is an economic concept that is used to determine the number of units that needs to be sold by the company to cover the costs and gain no profits. It is the level of units that a company should at least reach in order to survive in the market. Break-even is a level where a company neither earns any profits nor suffers any losses. Basically, the break-even point tells us the units to be sold in order to cover costs....

Importance of Break-even Analysis

Break-even Analysis is essential because of the following reasons:...

Components of Break-even Analysis

The three components of Break-even Analysis are as follows:...

Uses of Break-even Analysis

Following are some of the uses of Break-even Analysis:...

Calculation of Break-even Point

The break-even point is calculated using the selling price per unit, variable costs, and fixed costs....

Graphical Presentation of Break-even point

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