Question

​abby is marketing consultant who specializes in small businesses. her current client is very interested in estimating the costs for the coming year, in order to find the breakeven point. abby knows this is an important financial statistic because below the breakeven point, the firm is operating

Answer 1

below the break even point, the firm is losing money.

Step-by-step explanation:

The break even point is the output level at which the firm's revenue equals its costs. Above this level, the firm is operating at a profit, below this level, the firm is operating at a loss.

The formula for calculating break even point in units produced is:

break even point in units = total fixed costs / contribution margin per unit