BEP, or Break-Even Point, is a financial metric that indicates the level of sales needed to cover total costs, both fixed and variable. At this point, a business neither makes a profit nor incurs a loss. Understanding the BEP helps companies set sales targets and make informed decisions about pricing and budgeting. To calculate the BEP, businesses can use the formula: BEP = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit). This calculation provides insight into how many units must be sold to achieve financial stability, guiding strategic planning and operational efficiency.