Break-even point is important for business decisions:
- As break-even point marks the very lowest level to which activity can drop without putting the life of the company in jeopardy.
- By understanding break-even analysis, a firm can decide on which following strategies to use in order to increase profit or decrease loss like:
- Increase sale volume
- Increase selling price per unit
- Decrease fixed costs
- Decrease variable cost per unit
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