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Break-even charts are used to help in understanding the relationships between sales, costs, and operating profits or losses. The capacity stated in percentage form is represented on the horizontal axis of the chart. Revenue and costs are represented on the vertical axis. The total costs line begins at a point on the vertical axis. This point is equal to total fixed costs. The sales line begins at zero. When the sales and total costs lines intersect, the break-even point has been reached.
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