Break even chart

A break even chart is a chart that shows the sales volume level at which total costs equal sales.  Losses will be incurred below this point, and profits will be earned above this point. The chart plots revenue, fixed costs, and variable costs on the vertical axis, and volume on the horizontal axis. The chart is useful for portraying the ability of a business to earn a profit with its existing cost structure. The reader can see the unit volume sales level needed to achieve break even, and then needs to decide whether it is possible to reach this sales level.

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