ECONOMICS

Detailed explanation-1: -The fixed cost remains the same regardless. The point where the total costs line crosses the total sales line represents the breakeven point. This is the point of production where sales revenue will cover the costs of production.

Detailed explanation-2: -The break-even point (BEP) in economics, business-and specifically cost accounting-is the point at which total cost and total revenue are equal, i.e. “even". There is no net loss or gain, and one has “broken even", though opportunity costs have been paid and capital has received the risk-adjusted, expected return.

Detailed explanation-3: -A breakeven chart is a chart that shows the sales volume level at which total costs equal sales. Losses will be incurred below this point, and profits will be earned above this point. The chart plots revenue, fixed costs, and variable costs on the vertical axis, and volume on the horizontal axis.

Detailed explanation-4: -The break-even point is the point of intersection for the revenue and cost functions. Note: It is also useful to graph a function representing the fixed costs. Since the fixed cost is always 1200 no matter how many units are produced, a horizontal line (FC = 1200) represents the fixed costs function.