ECONOMICS

Detailed explanation-1: -The breakeven point is that point where total revenue equals total costs or expenses. The point represents the level of sales where the business makes neither a profit nor a loss. Additional sales beyond this point will result in profits.

Detailed explanation-2: -If a business is producing and selling more than the break-even level of output, a profit is being made and they have what is known as a margin of safety, which is effectively a safety net. The margin of safety is the number of units the business predicts to sell above their break-even point.

Detailed explanation-3: -The break-even point is the point at which total cost and total revenue are equal, meaning there is no loss or gain for your small business. In other words, you’ve reached the level of production at which the costs of production equals the revenues for a product.

Detailed explanation-4: -Your break-even point in units will tell you exactly how many units you need to sell to turn a profit. If you’re able to sell more units beyond this point, you’ll be making a profit. If you’re unable to sell enough products or services to meet this point, then your company will be losing money.