The break-even point is that level of activity where:

Question

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The break-even point is the level of activity where the total revenue earned from sales equals the total costs of producing the product or service. At the break-even point, there is no profit or loss. The contribution margin is the amount that each unit sold contributes towards covering the fixed costs and generating a profit. Therefore, when the contribution margin equals the fixed costs, the break-even point is reached.

The Break-Even Point Is That Level of Activity Where