Break-Even Point
Finance
Break-Even Point
Volume or revenue level at which total revenue equals total cost and profit is zero.
Examples
- 01A new packaging line costs EUR 400,000 a year in fixed cost, with a contribution of EUR 2 per unit, so the break-even point is 200,000 units.
- 02Every quarter, the controller recalculates the break-even point because energy prices have raised variable costs.
- 03Reducing changeover time lowers fixed cost per year and moves the break-even point of the small-batch product from 80,000 to 65,000 units.