Break-Even Sales

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Break-Even Sales

The revenue from sales necessary to cover costs and prevent a firm from operating at a loss. The breakeven sales may be relatively stable or may fluctuate, depending on the company or industry. Companies with high breakeven sales points tend to have large fluctuations in earnings from year to year.
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Break even sales were pounds 700 a day and, even with their mum and friends drinking in the shop each day, they were making just pounds 200 a day.
Break even sales = Overhead dollars/Gross margin percentage
The higher the break even sales volume point is, the more the customer must sell simply to reach that point, and the greater the likelihood the customer will not reach the target and the business will fail resulting in a bad debt loss.