At breakeven level of business

The breakeven point is where a business covers all costs without earning profit or loss. At this stage income equals expenses. This is a key tool for managers to decide pricing production and sales targets. For example if a company needs to sell 1000 units to cover fixed and variable costs then this quantity is the breakeven point. Selling above this creates profit while selling below leads to loss. Breakeven analysis is important for decision making because it shows the minimum effort needed to survive and plan for long term growth.