ENTREPRENEURIAL OPERATIONS
PRODUCTION PLANNING AND CONTROL
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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where a business is neither making a profit or loss
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how many items to make
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how much profit they’re making
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where a business has more fixed costs than variable
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Detailed explanation-1: -The final component of break-even analysis, the break-even point, is the level of sales where total revenue equals total costs. At this point no profit is made and no loss is incurred.
Detailed explanation-2: -As illustrated in the graph above, the point at which total fixed and variable costs are equal to total revenues is known as the break-even point. At the break-even point, a business does not make a profit or loss. Therefore, the break-even point is often referred to as the “no-profit” or “no-loss point.”
Detailed explanation-3: -The break-even point is when a company’s total costs meet its total revenues. Put simply, it’s the turning point for when a company is able to make a profit. Businesses use a break-even analysis to figure out how many units or services they need to sell to become profitable.
Detailed explanation-4: -Break-even is a situation where an organisation is neither making money nor losing money, but all the costs have been covered. Break-even analysis is useful in studying the relation between the variable cost, fixed cost and revenue. Generally, a company with low fixed costs will have a low break-even point of sale.