About Lesson
Break even analysis
- Breakeven analysis is a simple calculation, yet it’s valuable to managers because it points out the relationship between revenues, costs, and profits.
- To compute the breakeven point (BE), a manager needs to know the unit price of the product being sold (P), the variable cost per unit (VC), and total fixed costs (TFC).
- An organization or program breaks even when its total revenue is just enough to equal its total costs.
