Find the exact sales volume needed to cover fixed and variable costs.
Break-even analysis determines the sales volume at which total revenue equals total costs, resulting in neither profit nor loss.
Contribution margin is Sale Price per Unit minus Variable Cost per Unit.
Lower break-even point by cutting fixed costs, reducing variable costs per unit, or raising product sales price.
Fixed costs remain constant regardless of production level (e.g. rent, salaries, insurance).
Variable costs change in direct proportion to production output volume (e.g. raw materials, packaging).
It provides clear minimum sales targets for business profitability and financial stability.