... this either by using a chart or an equation. Breakeven chart Here is how to work out the breakeven point, using the example of a firm manufacturing compact discs. You can assume the compact disc firm has the following costs: Fixed costs: £10,000 Variable costs: £ 2.00 per unit You first construct a chart with output (units) on the horizontal (x) axis, and costs and revenue on the vertical (y) axis. On to this, you plot a horizontal fixed costs line (it is horizontal because fixed costs don't change with output). Then you plot a variable cost line from this point, which will, in effect, be the total costs line. This is because the fixed cost added to the variable cost gives the total cost. To do this, you multiply: variable cost per unit x number of units In this example of the CD manufacturing firm, you can assume that the variable cost per unit is £2 and ...

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