The break even point is important for anyone who manages a business because this point is the lower limit of profit when setting prices and determining margins the use of break even is important, especially where the business is starting off because you will need to check that your business is sooner or later able to cover costs and therefore.
Three assumptions of the break-even analysis the break-even analysis depends on three key assumptions: 1 average per-unit sales price (per-unit revenue): this is the price that you receive per unit of sales take into account sales discounts and special offers get this number from your sales forecast.
Video: using break-even analysis to evaluate a marketing plan watch this video lesson to learn how you can use a break-even analysis to help you decide whether a particular marketing plan is worth it or not.
The purpose of the break-even analysis formula is to calculate the amount of sales that equates revenues to expenses and the amount of excess revenues, also known as profits, after the fixed and variable costs are met there are many different ways to use this concept. The break-even point is the point at which gains equal losses reaching the break-even point is a business's first step toward profitability in conducting a break-even analysis, you need to know.