Break-even point
The break-even point is the level of activity at which revenue equals the costs included in the calculation. Above or below that level, the result changes under the assumptions used
What it means, how it is used and where it comes up, with its related concepts.
What it is and how it works
The calculation should state which costs are fixed, which vary and what product mix is assumed. It is not the time needed to recover an investment: that is a different question, involving cash flows and how they develop. A break-even figure loses its usefulness if prices, costs or the sales mix change without the model being updated.
Also known as
Break-even
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