Break-even analysis helps managers understand the relationships between fixed costs, variable costs, total costs, and profit and loss within an organization.

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Break-even analysis is a tool used by managers to determine the level of sales or revenue required to cover all fixed and variable costs and break even. This analysis helps managers understand the cost structure of their organization and how changes in sales volume or pricing will affect profitability.

Break-Even Analysis Helps Managers Understand the Relationships Between Fixed Costs