In accounting and business, the breakeven point (BEP ) is the production level at which total revenues equal total expenses. Break-even analysis refers to the identifying of the point where the revenue of the company starts exceeding its total cost i.e., the point when the project or company under consideration will start generating the profits by the way of studying the relationship between the revenue of the company, its fixed cost, and the variable cost. Break- Even Point (BEP) is the inflection point at which a company starts to generate a profit, as its revenue is equal to its total costs. Break - even formula There are several ways to use this concept. Let’s look at a few of them as well as an example of how to calculate break-even point . Since the price per unit minus the variable costs of product is the definition of the contribution margin per unit, you can simply rephrase the equation by dividing the fixed costs by the contribution margin. Break - even analysis helps in business owners take crucial decisions like at what price should a product or service be sold at. However ...
