Archive | Break Even Analysis

Determination of the Break-Even Point

The break-even point means the level of output or sales at which no profit or loss is achieved. It indicates the posi­tion at which marginal profit or contribution is just sufficient to cover fixed overheads. In other words, a business is said to break-even when its income equals its expenditure. When production exceeds the “Break-even […]

How to Obtain Break-Even Point ? (2 Methods) | Economics

There are following two methods to obtain break-even point: 1. Mathematical Method 2. Graphical Method. 1. Mathematical Method: Let cost be the common variable in two situations 1 and 2, then cost equations will be; C1 = f1(x)… a function of (x) …(1) C2 = f2(x)… another function of (x) …(2) C1 – may be […]