Break even charts can show Break even point

• Break-even charts

  Show costs and revenue plotted against output. Businesses use break-even charts to see how costs and revenue vary with different levels of output.
• Break-even chart

  1. Output shown on horizontal axis

  2. Costs and revenue shown on vertical axis

  3. Fixed costs, total costs and revenue plotted

  4. Break-even point where revenue line crosses total costs line
• Break-even point

  Where the revenue line crosses the total costs line
• Using a break-even chart to identify profit or loss

  1. Find value for total costs and revenue at chosen output level

  2. Subtract total costs from revenue

  3. If negative, it's a loss, if positive, it's a profit
• Changing variable costs or price


  Affects the break-even point
• When prices increase


  The revenue line gets steeper, so the break-even point is lowered