Define Breakeven Analysis Words Would Likely Use Breakeven Analysis Q34311269

Define breakeven analysis in your own words. When would you mostlikely use breakeven analysis? Why?

Expert Answer

Breakeven analysis is the method of ascertaining how much toproduce so that the total revenue just covers the total cost. Everysingle dollar earned above the breakeven analysis contributes tothe profit. A breakeven quantity is the number of units produced sothat the total revenue will be equal to the total cost from allresources i.e. zero profit.

Total sales = Fixed cost + Variable cost

(Selling price per unit x Units produced) = Fixed cost +(Variale cost per unit x Units produced)

The breakeven analysis is used in the