Break-even analysis is a helpful tool for businesses to assess at what point their total revenues equal their total costs, resulting in neither profit nor loss. It can be calculated using the following formula:

Break-Even Point (in units) = Fixed Costs / (Selling Price per - Variable Cost per Unit)

Here's a breakdown of the terms:

• Fixed Costs: are costs that do not vary with the level of production or, such as rent, salaries, and insurance.
• Selling Price per Unit: This is the price at which a of a product or service is sold.
• Variable Cost per: These are costs that vary with the level of production or sales, such as raw materials, direct labor, and sales commissions.

By using this formula, businesses can determine the number of units they need to sell in order to cover all and reach the break-even point. Beyond this point, each unit sold contributes to profit.

It's important to note that break-even analysis provides a valuable insight the profitability of a product or service and helps in making pricing and production decisions.