Break-even analysis

The measurement, evaluation and analysis of different break even points (the point of output where cost = revenue, no profit no loss situation) to find out the best break even point that will maximize the revenue of a firm. The break even point helps firms to analyze the point at which their costs or expenses (both fixed and variable costs) will be covered. By putting different prices of goods in the break even point formula an entity can obtain different quantities where cost = revenue then the firm select wisely the best quantity of goods (i.e. the best break even point) which should be produced, best match its need and effective for its market position.

For example if a firm change the price of goods from $5 to $10 , then the break even point quantity 2000 will change to break even quantity 3500 which the firm has to produce