Purpose of Break-even Analysis

Break Even Analysis Assignment Help businesses make informed decisions regarding pricing, production, and sales. By knowing the minimum amount of revenue they need to generate to cover their costs, businesses can set their prices accordingly.

For instance, if the break-even point is high, a business may need to charge a premium price to cover its costs and make a profit. Alternatively, if the break-even point is low, a business may be able to charge a lower price and still make a profit.

Calculation of Breakeven Analysis

The calculation of break-even analysis involves determining the contribution margin, fixed costs, and break-even point. The contribution margin is the difference between the revenue and variable costs per unit sold. To calculate the contribution margin, subtract the variable cost per unit from the selling price per unit.