# Break-even

In

economics , specificallycost accounting , the**break-even point**(BEP) is the point at which cost or expenses and revenue are equal: there is no net loss or gain, and one has "broken even". Therefore has not made a profit or a loss.**Computation**In the linear

Cost-Volume-Profit Analysis model, [*Where marginal costs and marginal revenues are constant, among other assumptions.*] the break-even point (in terms of Unit Sales (X)) can be directly computed in terms of Total Revenue (TR) and Total Costs (TC) as::$egin\{align\}\; ext\{TR\}\; =\; ext\{TC\}\backslash \; ext\{P\}\; imes\; ext\{X\}\; =\; ext\{TFC\}\; +\; ext\{V\}\; imes\; ext\{X\}\backslash \; ext\{P\}\; imes\; ext\{X\}\; -\; ext\{V\}\; imes\; ext\{X\}\; =\; ext\{TFC\}\backslash left(\; ext\{P\}\; -\; ext\{V\}\; ight)\; imes\; ext\{X\}\; =\; ext\{TFC\}\backslash \; ext\{X\}\; =\; frac\{\; ext\{TFC\{\; ext\{P\}\; -\; ext\{Vend\{align\}$where:

***TFC**is**Total**,Fixed Costs

***P**is**Unit Sale Price**, and

***V**is**Unit Variable Cost**.The quantity $left(\; ext\{P\}\; -\; ext\{V\}\; ight)$ is of interest in its own right, and is called the

**Unit Contribution Margin**(C): it is the marginal profit per unit, or alternatively the portion of each sale that contributes to Fixed Costs. Thus the break-even point can be more simply computed as the point where Total Contribution = Total Fixed Cost::$egin\{align\}\; ext\{Total\; Contribution\}\; =\; ext\{Total\; Fixed\; Costs\}\backslash \; ext\{Unit\; Contribution\}\; imes\; ext\{Number\; of\; Units\}\; =\; ext\{Total\; Fixed\; Costs\}\backslash \; ext\{Number\; of\; Units\}\; =\; frac\{\; ext\{Total\; Fixed\; Costs\{\; ext\{Unit\; Contributionend\{align\}$In currency units (sales proceeds) to reach break-even, one can use the above calculation and multiply by Price, or equivalently use the Contribution Margin Ratio (Unit Contribution Margin over Price) to compute it as:$ext\{Break-even\; Point\; (in\; Sales)\}\; =\; frac\{\; ext\{Fixed\; Costs\{\; ext\{C\}/\; ext\{P.$

R=CWhere R is revenue generatedC is cost incurred i.e. Fixed costs + Variable Costsor Q X P(Price per unit)=FC + Q X VC(Price per unit)Q X P - Q X VC=FC Q (P-VC)=FCor Q=FC/P-VC=Break Even Point

**Application**The break-even point is one of the simplest yet least used analytical tools in management. It helps to provide a dynamic view of the relationships between sales, costs and profits. A better understanding of break-even—for example, expressing break-even sales as a percentage of actual sales—can give managers a chance to understand when to expect to break even (by linking the percent to when in the week/month this percent of sales might occur).

The break-even point is a special case of

Target Income Sales , where Target Income is 0 (breaking even).There is a myth that Black Friday is the annual break-even point in American

retail sales, but in fact retailers generally break-even (and indeed profit) nearly every quarter.lololo**Other uses of the term**The break even point is also the point on a

chart indicating the time when something has broken even, and is a general term for not having gained or lost something in a process.In

nuclear fusion research, the term**breakeven**refers to afusion energy gain factor equal to unity, this is also known as theLawson criterion .The notion can also be found in more general phenomena, such as

percolation , and is rather similar to thecritical threshold . In energy, the "breakeven" point is the point where usable energy gotten from a process exceeds the input energy.In

computer science , the term refers to a point in the life cycle of aprogramming language where the language can be used to code its owncompiler or interpreter. This is also called. This usually marks a transition from a "toy" language to a language usable in the real world.self-hosting In

medicine , it is a postulated state when the advances of medicine permit every year an increase of one year or more of the life expectancy "of the living", therefore leading to medical immortality [*cite book*] (barring accidental death).

last = Kurzweil, Grossman

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coauthors = Ray Kurzweil and Terry Grossman

title = Fantastic Voyage: Live Long Enough to Live For Ever

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isbn =**See also***

Break even analysis

*Margin of safety**References****Further reading*** [

*http://www.advanced-excel.com/breakeven.html More about Break-even and calculating Breakeven using Excel Goal Seek*]

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### Look at other dictionaries:

**break even**— {v. phr.}, {informal} (stress on even ) To end a series of gains and losses having the same amount you started with; have expenses equal to profits; have equal gain and loss. * /The storekeeper made many sales, but his expenses were so high that… … Dictionary of American idioms**break even**— {v. phr.}, {informal} (stress on even ) To end a series of gains and losses having the same amount you started with; have expenses equal to profits; have equal gain and loss. * /The storekeeper made many sales, but his expenses were so high that… … Dictionary of American idioms**Break-even**— Break|even auch: Break even 〈[brɛıki:vən] m. 4; Pl. selten; Wirtsch.; kurz für〉 Breakevenpoint * * * Break even [breɪk |i:vn̩ ], der; [s], s (Wirtschaftsjargon): Kurzf. von … Universal-Lexikon**break even**— /brekˈivən, ingl. ˈbreɪkˌiv(J)n/ [lett. «chiusura (break) alla pari (even)»] loc. sost. m. inv. (econ.) pareggio … Sinonimi e Contrari. Terza edizione**break even**— If you break even, you don t make any money, but you don t lose any either … The small dictionary of idiomes**Break-even**— [bre:k |i:vn̩ ], der; [s], s <englisch> (kurz für Break even Point) … Die deutsche Rechtschreibung**break even**— [v] be or become equal balance books, equalize, experience no loss, recover cost, recover expense; concepts 126,232 … New thesaurus**break-even**— [brāk΄ē′vən] adj. designating that point, as in a commercial venture, at which income and expenses are equal … English World dictionary**break even**— verb 1. make neither profit nor loss (Freq. 1) • Ant: ↑profit, ↑lose • Verb Frames: Somebody s 2. attain a level at which there is neither gain nor loss, as in business, gambling, or a competitive sport (Freq. 1) … Useful english dictionary**Break-even**— Dieser Artikel oder Abschnitt bedarf einer Überarbeitung. Näheres ist auf der Diskussionsseite angegeben. Hilf mit, ihn zu verbessern, und entferne anschließend diese Markierung. Die Gewinnschwelle oder der Break even Point ist in der… … Deutsch Wikipedia