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# 5-2 - As we know if the company gets the break-even they...

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PART TWO :       Using the attached article for reference please respond to the following questions in essay form. 1. Explain why calculating a “break-even” point should be the first step for any potential business. “Break-even” point is the point at which total revenues equal total costs. It is very important for the company in order to make and rum business. In other words, if the company knows the total revenue and the total cost. They will know their break-even point. The company should know the cost to break-even, because if they pass their break-even point, they are going to get profit. Consequently, they have to calculate the break-even for the first step in order to know how much the product cost is so that they will be able to achieve their break-even faster.
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Unformatted text preview: As we know, if the company gets the break-even, they will be on the profitable area. 2. What options are available if the initial break-even calculations show that the company will be performing “below” the break-even point? Please explain? When the break-even point performs that it is below the point, it means that the company is in the loss area so the company should find any policies in order to reach the break-even as fast as they can. In other meanings, if they are able to the pass break-even point, they will be in the profitable area. As a consequence, the company should find their break-even per unit in order to find the break-even in dollar. Then, they will know how much they should sell which will reach the break-even....
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