2.2.3 Break even analysis

Question 1

What is break even expressed as?

Answer 1

as an output, rather than a monetary value.

Question 2

What is break even?

Answer 2

The point where revenue equals costs, the business is neither making a loss or a profit.

Question 3

What are the limitations of break even?

Answer 3

• Assumes every item is sold.
• Costs may increase.
• Only a predication.
• Fixed costs may be spread across a portfolio of products.