Definition of Break-Even Point

Definition of Break-Even Point

Definition:

Break-Even Point used for the calculation of Margin of safety by comparing the┬árevenue’s amount or units that must be sold in order to cover fixed and variable cost associated with making sales.

Definition of Break-Even Point

It is used to calculate the profitability of the business by equating the total revenue with total expenses of the business. In managerial accounting and for cost accounting this equation use for different purpose.

The main purpose of Break-even point is to calculate the profit of the business after the met of fixed and variable cost. For many other concepts, this ratio is also used.

Financial Ratio is a forum where you will learn about all ratios definitions and formulas.

Spread the love

Leave a Comment