ECONOMICS

Detailed explanation-1: -In accounting, the breakeven point is calculated by dividing the fixed costs of production by the price per unit minus the variable costs of production.

Detailed explanation-2: -The calculation for the break-even point can be done one of two ways; one is to determine the amount of units that need to be sold, or the second is the amount of sales, in dollars, that need to happen. The break-even point allows a company to know when it, or one of its products, will start to be profitable.

Detailed explanation-3: -There are three main methods used to calculate break-even points-Cost Volume Profit Analysis, Break Even Point in Units and Break Even Point in Sales Value-each of which has its own advantages depending on individual circumstances and businesses needs.

Detailed explanation-4: -This figure is usually expressed as a percentage. It’s calculated by subtracting your fixed costs from your contribution margin. From there, you can determine what you need to do to break even, like cutting production costs or raising your prices.