In accounting, the term “break-even point” refers to the level of production or sales at which a particular company neither incurs any loss nor generates any profit. In other words, a company generates just enough revenue to meet all its expenses, so it doesn’t earn any profit. Mostly ...
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It is the point at which revenue is equal to costs and anything beyond that makes the business profitable. Formula: break-even point = fixed cost / (average selling price - variable costs) Before we calculate the break-even point, let’s discuss how the break-even analysis formula works. ...
In accounting, economics, and business, the break-even point is the point at which cost equals revenue (indicating that there is neither profit nor loss). At this point in time, all expenses have been accounted for, so the product, investment, or business begins to generate profit. The con...
What is the break-even point?Cost accountingCost accounting is a part of managerial accounting that attempts to capture a company's overall cost of production by analysing both variable and fixed costs associated with each phase of production. It assists management in internal decision making....
In accounting, break-even point means the point of sales where total revenue is equivalent to the total cost. It means at this point of sales there... Learn more about this topic: Cost-Volume-Profit Analysis & Income Statements from
Accounting How to Calculate the Break-Even Point May 1, 2025 To calculate the break-even point in units use the formula: Break-Even point (units) = Fixed Costs ÷ (Sales price per unit – Variable costs per unit) or in sales dollars using the formula: Break-Even point (sales dollars)...
Break-even analysis in economics, financial modeling, and cost accounting refers to the point in which total cost and total revenue are equal.
TheBreak-Even Pointis whereTotal Costsequal Sales. In theCost-Volume-Profit Analysismodel, Total Costs are linear in volume. Ineconomics&business, specificallycost accounting, thebreak-even point(BEP) is the point at which cost or expenses and revenue are equal: there is no net loss or gain...
The formula to calculate the break-even point in terms of the number of units is: Break-Even Point in Units = Fixed Cost / (Sales Price Per Unit – Variable Cost Per Unit) There is another simplified formula for calculating the BEP in terms of the number of units. That is, ...