ECONOMICS

Detailed explanation-1: -The contribution margin is selling price per unit minus VARIABLE expenses per unit. Break-even analysis is useful for companies that sell products, but it is not useful for companies that provide services. Break-even analysis is useful for service companies as well as companies that sell products.

Detailed explanation-2: -A break-even analysis is a financial tool that helps you determine at which stage your company, service or product will be profitable. It is a financial calculation used to determine the number of products or services a company must sell to cover its expenses, especially the fixed costs.

Detailed explanation-3: -Break-even analysis is a small-business accounting process for determining at what point a company, or a new product or service, will be profitable. It’s a financial calculation used to determine the number of products or services you must sell to at least cover your production costs.

Detailed explanation-4: -However, break-even analysis does have some drawbacks: break-even assumes a business will sell all of the stock (of a particular product) at the same price. businesses can be unrealistic in their calculations. variable costs could change regularly, meaning the analysis could be inaccurate.

Detailed explanation-5: -A break-even analysis is an economic tool that is used to determine the cost structure of a company or the number of units that need to be sold to cover the cost.