What is meant by Break-even point? Why is it important for an entrepreneur to calculate Break-even point? State any four reasons.

Question

Accepted Answer

It is the point where the business is in a position of no profit or no loss. Calculation of BEP is useful as it helps in assessing: 1) The minimum level of output to be produced. 2) The effect of change in quantity of output upon the profits. 3) The selling price of the product. 4) The profitable options in line of production.