GlossariesGCSE GlossariesGCSE Business GlossaryBreak-Even Output

Break-Even Output - GCSE Business Definition

Reviewed by: Lisa Eades

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Break-even output refers to the level of sales a business must achieve in order to cover all its costs, without making a profit or a loss. At this point, the total revenue generated from selling goods or services precisely matches the total costs of production, which includes both fixed and variable costs.

The break even output is expressed in units and is calculated using the formula:

Break space even space output space equals space fraction numerator Fixed space price over denominator Selling space price space minus space Variable space cost space per space unit end fraction

Understanding break-even output is crucial for businesses as it helps them determine the minimum sales volume required to avoid financial loss. For GCSE Business students, this concept is important because it aids in making informed decisions about pricing, production, and sales strategies. Calculating the break-even output helps businesses plan more effectively and manage their resources efficiently.

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Lisa Eades

Reviewer: Lisa Eades

Expertise: Business Content Creator

Lisa has taught A Level, GCSE, BTEC and IBDP Business for over 20 years and is a senior Examiner for Edexcel. Lisa has been a successful Head of Department in Kent and has offered private Business tuition to students across the UK. Lisa loves to create imaginative and accessible resources which engage learners and build their passion for the subject.

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