An equation representing the sales a company requires to simply to cover costs, without losing money or making a profit. A company needs to at least break even in order to make the expense of producing a product worth the effort. As a result, a breakeven equation is an important feature in evaluating the risk of an activity. Breakeven equations calculate the relationship between the fixed costs, variable costs and revenue of the product.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved