Learn what break-even analysis is, how it works, and how to calculate the break-even point using formulas to assess costs, revenue, and profitability.

The world of microeconomics and business decision-making hinges upon a key concept: marginal cost. In the simplest terms, marginal cost represents the expense incurred to produce an additional unit of ...

The high-low method is used in cost accounting to estimate fixed and variable costs based on a business's highest and lowest levels of activity. By focusing on these extremes, the high-low method ...

Understanding the expenses you find on the income statement is key to making smart investments. For the beginning investor, one of the most important keys to learning about a business is understanding ...

A change in demand affects your sales and impacts your variable costs. As your sales grow, your variable costs increase. As your sales fall, your variable costs decrease. If you raise or lower your ...

Will Kenton is an expert on the economy and investing laws and regulations. He previously held senior editorial roles at Investopedia and Kapitall Wire and holds a MA in Economics from The New School ...

Incremental cost is an important calculation for understanding numbers at different levels of scale. The calculation is used to display change in cost as production rises. If you manufacture one unit ...