A business: revenue, costs and profit
You make a profit when revenue is higher than all your costs. The break-even point tells you how much you need to sell to break even.
Why
Your class wants to sell waffles at the school fair to pay for the school trip. How many waffles do you need to sell to really earn something?
When you sell something, you first see the money coming in. But money also goes out: for the stand, the batter, the plates. Only what is left after all the costs is profit.
Every business, from a waffle stand to a big factory, works it out this way. If you know your costs well, you can choose a price and you know how much you need to sell so you do not make a loss.
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