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    mstillylace's Avatar
    mstillylace Posts: 13, Reputation: 1
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    #1

    Jun 21, 2008, 07:39 AM
    C-V-P analysis
    Okay I know that CVP Analysis is a way to quickly answer a number of important questions about the profitability of a company's products or services. CVP Analysis can be used with either a product or service. What I'm stuck on is what it's means to "break-even"?
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #2

    Jun 22, 2008, 01:28 AM
    Break even simply means that you have no profit or loss. Your total expenses equals your total revenues, so you just broke even. Since there's very little chance of this ever actually happening, it's used to find out where that point is, so that you know how many units hits break even -- you have to sell at least that many, and everything beyond that is going positive. i.e. profit.
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