Explain the concept of break-even with a chart and a worked example. State its uses and limitations.

1. 1 · Open in two lines. The break-even point is the sales level at which total sales equal total cost, with no profit and no loss. It shows the minimum a unit must sell.
2. 2 · Key terms and formulas.
   • Contribution = price − variable cost.
   • BEP (units) = fixed cost ÷ contribution.
   • P/V ratio, BEP in rupees, margin of safety.
3. 3 · Worked example. Thali ₹80, variable ₹50, fixed ₹90,000: contribution ₹30; BEP 3,000 thalis (₹2,40,000).
4. 4 · Draw the break-even chart. [Graph: fixed cost line flat; total cost line from fixed level; sales line from zero; BEP where sales cross total cost; loss and profit areas marked]
5. 5 · Uses and limitations. Uses: minimum sales, pricing, new outlets, subsidy. Limits: constant price and variable cost, fixed costs unchanged, all output sold.
6. 6 · In a real kitchen. A school canteen uses its BEP to judge the subsidy needed to keep good food at a fair price.
7. 7 · Close in one line. Break-even analysis turns costs into a clear sales target for every food service unit.

Scoring tip: Label the chart fully (axes, three lines, BEP, profit and loss areas); a neat chart can carry three or four marks.