Breakeven Analysis
Overview
To make well informed decisions, business
owners need to fully understand the expenses in their
business as well as the profitability of their sales.
This information allows accurate pricing decisions and
management of the business to maximize profitability.
What Is It?
A breakeven analysis calculates the
relationship of sales volume, sale price and expenses
(fixed and variable).
Specifically, it identifies the sales
volume level needed to achieve a breakeven profit level.
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