ECONOMICS

Detailed explanation-1: -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-2: -The break even analysis is important to business owners and managers in determining how many units (or revenues) are needed to cover fixed and variable expenses of the business. Therefore, the concept of break even point is as follows: Profit when Revenue > Total Variable Cost + Total Fixed Cost.

Detailed explanation-3: -Explanation: A breakeven analysis is used to determine how much sales volume your business needs to start making a profit, based on your fixed costs, variable costs, and selling price.