FIN 370 Week 2 DQ 1

Basic Definition: What is the break-even point?
PLUS:
Go to the UOP Library. Find a peer-reviewed article that answers one of the following questions. Identify and analyze the author’s thesis. What is their conclusion? Do you agree with the author? Why or why not? Be sure to cite your references.
• What decisions does the break-even point help an organization make?
• What actions might an underperforming organization take to reach the break-even point? What are the risks and rewards of each?

Response:
Basic Definition: What is the break-even point?
The accounting break-even point is the level (point) of sales or output that is necessary to cover both variable and total fixed costs, where total fixed costs equal cash fixed costs plus depreciation, such that the net operating income is equal to zero.
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