Break-Even Point: The sales volume at which total revenue equals total costs, resulting in zero profit or loss.
Fixed Costs (FC): Costs that remain constant regardless of output (e.g., rent, salaries).
Variable Costs (VC): Costs that change directly with production volume (e.g., materials, labor per unit).
Selling Price (SP): The amount charged to customers for each unit sold.
Quantity (Q): The number of units produced or sold.
Net Income (NI): Profit after all costs have been deducted from total revenue.
Contribution Margin: The difference between selling price and variable cost per unit ($SP - VC$), representing the amount available to cover fixed costs and generate profit.
CVP Analysis: Cost-Volume-Profit analysis, a tool to assess how changes in cost and volume affect a company's operating income and net income.