Question

What does a break-even analysis tell a business planner?

Answer 1

The break-even analysis lets you determine what you need to sell, monthly or annually, to cover your costs of doing business—your break-even point. The break-even analysis table calculates a break-even point based on fixed costs, variable costs per unit of sales, and revenue per unit of sales.

Answer 2

A break-even analysis tells a business planner how much they need to sell monthly, quarterly, or annually in order to cover the business costs. This gives you a understanding of what you will need to sell in order to make a profit. Typically it would involve making a chart that shows your fixed costs, variable costs, and what the revenue is per unit of sales.