Question

Break-even point

Answer 1

The break-even point is the level of sales at which a company's total revenues equal its total expenses, resulting in neither a profit nor a loss. At this point, the company has covered all of its costs and is simply breaking even. Beyond the break-even point, any additional sales will result in profit for the company. The break-even point can be calculated by dividing total fixed costs by the contribution margin per unit.