Break-Even Charts Law and Legal Definition

Break-even chart is a graphical representation showing the total revenue and the total cost curves for a business. It shows the financial revenue of a business unit against time or sales. It helps to determine the break-even point when sales output is equal to revenue generated. Usually, a break-even chart depicts production level and costs at various levels of activity as the variation of income is shown with the variation in activity. A break-even chart can be used to illustrate and forecast a company's projected revenue, to calculate the time for reaching profit in a business, to predict the effect that changes in price will have on the percentage change in sales over time, and to analyze the relationship between fixed and variable costs and to predict the effect on profitability of changes to those costs.