Question

A break even point of a firm the following condition must be fulfilled

Answer 1

Answer:

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Explanation:

Meaning of Break-Even Point:

The break-even point may be defined as that level of sales in which total revenues equal total costs and net income is equal to zero. This is also known as no-profit no-loss point. This concept has been proved highly useful to the company executives in profit forecasting and planning and also in examining the effect of alternative business management decisions.

The break-even point (B.E.P.) of a firm can be found out in two ways. It may be determined in terms of physical units, i.e., volume of output or it may be determined in terms of money value, i.e., value of sales.