Info Search

Tuesday, March 17, 2009

THE BREAKEVEN POINT

The word contribution has been given its name because of the fact that it literally
contributes towards the recovery of fixed costs and the making of profits. The contribution
grows along with the sales revenue till the time it just covers the fixed cost. This point
where neither profits nor losses have been made is known as a break-even point. This
implies that in order to break even the amount of contribution generated should be exactly
equal to the fixed costs incurred.

No comments:

GetMyArticles.com: Free Web Site Articles and Content