![]() ![]() Past the break-even point, the organization can determine the revenue target for a specified period, such as the annual revenue target. The company becomes aware of the number of units they must sell to recover production costs and work towards it. Set sales and revenue targets – The break-even point represents the company’s goals in terms of sales and revenue.By listing all the costs of production, break-even analysis can help the company identify costs that might have been left out. Catching missing expenses – When planning revenue generation, it is easy to leave out some costs. ![]() Cover fixed costs – The break-even point is calculated from the total fixed costs, meaning the company can strategize on how these fixed costs will be met after the analysis.Price smarter – If effectively carried out, a break-even analysis is an effective tool in determining the appropriate figures to price products and services so that costs are recovered, and the business gets to make a profit.This article will illustrate when a break-even analysis is used and its importance in business by illustrating the benefits a company is expected to gain from using break-even analysis. The uses of break-even analysis in business are diverse and of great importance in ensuring that a business remains profitable.
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