Breakevenin

Breakevenin is a term used in business analysis to describe the breakeven condition under a defined set of assumptions about price, costs, and sales volume. It is commonly employed in scenario planning to compare how different pricing or cost structures affect profitability.

In a single-product context, Breakevenin is reached when revenue covers all costs: P × Q = F + v × Q, where P is price per unit, Q is quantity, F is fixed costs, and v is variable cost per unit. Solving gives Q = F / (P − v). For multiple products or dynamic pricing, a contribution-margin approach is used: the breakeven quantity or sales mix is determined by fixed costs divided by the weighted average contribution margin.

Breakevenin supports decisions on pricing strategies, product launches, capital investments, and cost restructuring. Analysts run scenarios by changing P, v, and F to observe how the Breakevenin point shifts.

The method assumes other factors stay constant, including demand. It ignores capacity constraints, market competition, and nonlinear costs; real-world profitability may diverge from the Breakevenin point.

The term is not widely standardized and occurs primarily in training materials and case studies as a variant of traditional break-even analysis. Related concepts include breakeven point, break-even analysis, contribution margin, and cost–volume–profit analysis.