Concept Introduction:
Break-even point is a point at which the total sales equal the total costs. In the same manner, break-even sales mean that the volume of sales, equates to the cost of the company. We can say that the sale done just to recover the costs incurred by the company is the break-even sales.
1) The number of units to be sold to reach the breakeven point.
2) The margin of safety in units and dollars, when the units sold per month are 945.
3) The number of units to be sold to earn profit of $15,000.
4) The new breakeven point in units, with the change in situation and its impact on the margin of safety.
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