If a firm with $49,000 in fixed costs breaks even on 7,000 units, how many units must the firm sell to earn $30,000 in operating profit?
Whenever sales generated and costs incurred within a specific period are equal, a corporation breaks even for that period. As a result, the break-even point is the point at which a corporation generates no net profit or loss. A corporation's break-even point can be expressed in terms of dollars of sales revenue or units produced or sold. It doesn't matter how a business presents its break-even point; it's still the point when there's no profit or loss. It's crucial to comprehend that not all costs are created equal in order to grasp the idea of break even: Some of them are fixed, while others are flexible.
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