In business accounting, the break-even point refers to the amount of revenue necessary to cover the total fixed and variable expenses incurred by a company within a specified time period. … At this point, a project, product or business is financially viable.
What is breakeven point example?
For example, selling 10,000 units would generate 10,000 x $12 = $120,000 in revenue. … The break even point is at 10,000 units. At this point, revenue would be 10,000 x $12 = $120,000 and costs would be 10,000 x 2 = $20,000 in variable costs and $100,000 in fixed costs.
What is the break-even point called?
Break-even (or break even), often abbreviated as B/E in finance, (sometimes called point of equilibrium) is the point of balance making neither a profit nor a loss. Any number below the break-even point constitutes a loss while any number above it shows a profit.
What is break-even point explain its uses?
Break-even point represents that volume of production where total costs equal to total sales revenue resulting into a no-profit no-loss situation. … Break-even point has a wide use in the field of marginal costing and helps to decide the product mix, fixation of selling price, steps to be taken in long-term planning etc.What is breakeven point Wikipedia?
The break-even point (BEP) in economics, business—and specifically cost accounting—is the point at which total cost and total revenue are equal, i.e. “even”. There is no net loss or gain, and one has “broken even”, though opportunity costs have been paid and capital has received the risk-adjusted, expected return.
