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. The breakeven point is the level of production at which the costs of production equal the revenues for a product.

Detailed explanation-2: -This pricing methodology helps the company in setting up the lowest acceptable price. Break-even price is calculated by using this formula = (Total fixed cost/Production unit volume) + Variable Cost per unit.

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: -The breakeven point (BEP) formula is determined by dividing the total fixed costs associated with production by the contribution per unit, i.e, Sale price per unit minus the variable costs per unit.