Question
When a company compares its sales and expenses to
determine that volume of production where there is no profit and no loss. This type of analysis is known as:Solution
Breakeven analysis is used to determine when your business will be able to cover all its expenses and begin to make a profit. The breakeven point is reached when revenue equals all business costs. To calculate your breakeven point, you will need to identify your fixed and variable costs. Break Even point = Fixed cost / (Sale price-variable cost)
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