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breakeven - Coggle Diagram
breakeven
4 important points
1) to break even means that a business total costs are equal to its total revenue. They are making enough money from sales revenue to cover all costs, but no more than that
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3) There is also a formula we can use which will show a business how many units they need to sell in order to cover all of their costs
4) The reason it has to be broken down is; not all costs vary with output, therefore you have to look at variable costs and fixed costs separately
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advantages: quick and simple, easy to understand, helps spot potential problems, can assist when applying for a loan
disadvantages: it is only a forecast, assumes all products are made and sold, costs may change, not very good for services because prices vary enormously
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