How to use a break even line?
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<p id="isPasted"><strong>How to use a break-even line:</strong></p><p>1. Calculate the break-even point:</p><p>This is typically done using a formula that divides fixed costs by the contribution margin (selling price per unit minus variable costs per unit). </p><p>Break-even point (units) = Fixed Costs / (Sales price per unit - Variable cost per unit) </p><p>Break-even point (sales dollars) = Fixed Costs / Contribution Margin </p><p>2. Visualize the information:</p><p>A break-even chart visually represents total revenue and total costs, with the break-even point being the intersection of the two lines. </p><p>3. Analyze the results:</p><p>The break-even point helps you understand:</p><p>How much sales revenue …</p>
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