Answer : Meaning
of Break-even point :
- Break-even point is the exact point where we get Sales
- Expenses = Zero.
- Break-even point is point where we are not making any money but
also not loosing any money.
- Break-even point helps business to determine the cost
structures.
The calculation
of Break-even point is important to management is of following
reasons :
- Break-even point's calculation helps management to calculate
number of units to be sold in order to cover the cost and beyond
that unit production will lead to profit.
- Break-even point helps management to generate positive cash
flows.
- Break-even point helps company to determine at what stage your
company.