The break-even point is the point at which total revenues equal total costs, resulting in neither profit nor loss. It helps businesses determine how much they need to sell to cover their expenses. Understanding this point is crucial for effective financial planning and decision-making. To calculate the break-even point, businesses consider fixed costs, which do not change with production levels, and variable costs, which fluctuate with output. By analyzing these costs alongside sales prices, companies can identify the minimum sales volume required to avoid losses, guiding their pricing and production strategies.