Break Even Point Calculator
What Is the Breakeven Point?
In corporate accounting, the breakeven point (BEP) is the moment a company's operations stop being unprofitable and starts to earn a profit. The breakeven point is the production level at which total revenues for a product equal total expenses. The breakeven point can also be used in other ways across finance such as in trading.
Key Takeaways
- In accounting, the breakeven point is calculated by dividing the fixed costs of production by the price per unit minus the variable costs of production.
- The breakeven point is the level of production at which the costs of production equal the revenues for a product.
- In investing, the breakeven point is said to be achieved when the market price of an asset is the same as its original cost.
- A breakeven analysis can help with finding missing expenses, limiting decisions based on emotions, establishing goals, securing funding, and setting appropriate prices.
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