breakeven chart

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A graph on which an organization’s total costs, analysed into fixed costs and variable costs, are drawn over a given range of activity, together with the sales revenue for the same range of activity. The point at which the sales-revenue curve crosses the total-cost curve is known as the breakeven point (expressed either as sales revenue or production/sales volume). The breakeven chart, like breakeven analysis, may also be used to determine the profit or loss likely to arise from any given level of production or sales, the impact on profitability of changes in the fixed or variable costs, and the levels of activity required to generate a required profit.

Subjects: Accounting.

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