Glossarytaught in M4.02, CN2.01
Break-even
Also called break even point, breakeven.
The volume at which contribution exactly covers fixed costs and profit is zero.
With ₹42,00,000 of monthly fixed costs and ₹90 of contribution per order, a business breaks even at about 46,667 orders a month.
Break-even is the fastest way to test whether a plan is plausible. Compare the required volume to market size and to capacity. Then compare it to what competitors achieve.
It also shows the shape of the risk. Breaking even at 80% of capacity leaves a business almost no margin for a demand disappointment.