Question

explain the term break even point what are its use​

Answer 1

The break even point is the production level where total revenues equals total expenses. In other words, the break-even point is where a company produces the same amount of revenues as expenses either during a manufacturing process or an accounting period. Since revenues equal expenses, the net income for the period will be zero.

The company didn’t lose any money during the period, but it also didn’t gain any money either. It simply broke even.

Both of these measurements are key concepts for management in any industry. Retailers can use it to see how much product they must sell to meet their minimum costs. Manufacturers can calculate the amount of product that must be produced and sold during a period.