ECONOMICS

Detailed explanation-1: -If revenues are less than total cost, a company does not reach the break-even point, which results in a loss. A company that fails to make enough sales to meet the break-even point accumulates debt over time, which can eventually cause a company to go out of business.

Detailed explanation-2: -The break-even point is essential for business owners because it represents the minimum level of sales that must be achieved to generate a profit. If a business owner knows the break-even point, they can make informed decisions about pricing, production levels, and other factors that impact the bottom line.

Detailed explanation-3: -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.

Detailed explanation-4: -Break-even point This is the point where your total revenue (sales or turnover) equals total costs. At this point there is no profit or loss-in other words, you ‘break even’. Knowing your break-even point can help you make a decision about your selling prices, set a sales budget and prepare your business plan.

Detailed explanation-5: -Break-Even Decrease The result of is a decrease in your break-even point. This means your business must generate less revenue to break even after you increase the contribution margin for your products than prior to the contribution margin increase.