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What is Break Even

The Break-even point is defined as the point where total gross revenue from sales equals total fixed expenses plus total variable expenses.

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What is Break-Even

This article explains how to calculate the Break-Even point any business.

The Break-even point is defined as the point where total gross revenue from sales equals total fixed expenses plus total variable expenses.

Definitions

Fixed expenses are constant regardless of the amount of business transacted. If no business transactions occurred, these expenses would still remain a fixed amount. One example is rent, another is depreciation.
Variable expenses, as the name implies, vary with the volume of business done and disappear completely when there are no sales. An example of such expense items would be material costs, direct workers pay, sales commissions, etc.

The formula for calculating the Break-even point is:

Fixed Costs or Overhead
--------------------
GP %

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