Title: (Optional) Identify the break-even point.
Course: Make It Your Business (12151-6) > Section: Developing a Financial Plan

Identification should include

- the definition of break-even point (i.e., the point at which sales revenue equals the total cost of producing and distributing the product or service)
- the reason for conducting a break-even analysis (i.e., to evaluate profit potential)
- the formula used to calculate the break-even point (i.e., fixed costs divided by selling price minus variable costs)
- the formula used to calculate net profit or loss (i.e., total revenue [income] minus total expenses [costs]).

Process/Skill Questions:

- How does a business determine the break-even point for a product/service?
- How does the break-even point affect business decisions?
- How can the business owner communicate company financial goals to employees?
- Why is it important to determine break-even points before a business starts operation?
- When is equilibrium achieved?
- How does seasonality affect the break-even point projection?