At the break-even point, total revenue is exactly equal to total costs (both fixed and variable).

Fixed expenses do not change with changes in the level of production, so any change in fixed expenses will not affect the break-even point.

A decrease in variable costs per unit will reduce the break-even point.

Break-even analysis is only useful for companies that produce tangible products and is not applicable for service companies.

The contribution margin per unit is calculated as the selling price per unit minus the variable cost per unit.

The break-even point in units is determined by dividing total fixed costs by the contribution margin per unit.

If the selling price per unit increases while the variable cost per unit remains constant, the break-even point in units will increase.

An increase in fixed costs, with no change in sales price or variable cost, will result in a higher break-even point.

When the variable cost as a percentage of sales increases, the break-even point in sales dollars increases.

The break-even point in dollars is computed by dividing total fixed costs by the contribution margin ratio.

The margin of safety is the difference between actual sales and break-even sales and is a measure of risk.

At the break-even point, the operating profit is zero.

Break-even analysis can assist in decision making related to pricing, cost control, and profit planning.

The actual number of units sold effects the calculation of the break-even point.

If the selling price per unit decreases while the variable cost per unit remains constant, the break-even point in units will decrease.

There is more than one calculation method that can be used in break even analysis.