ECONOMICS

Detailed explanation-1: -To draw a break-even chart, we need to follow six steps: draw axes; draw a line indicating fixed costs; draw a line indicating variable costs; draw a line indicating total costs; draw a line indicating revenue; mark the break-even point.

Detailed explanation-2: -To determine the break-even point graphically, the total cost curve of a product over time is plotted in a diagram. On the x-axis (horizontal axis) you plot the sales volume (how many products are sold) and on the y-axis (vertical axis) you plot the total cost of producing a given quantity of product.

Detailed explanation-3: -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. The breakeven point is the level of production at which the costs of production equal the revenues for a product.

Detailed explanation-4: -A firm’s break-even point occurs when at a point where total revenue equals total costs.