If companies that are operating below the breakeven point ca

If companies that are operating below the break-even point cannot raise prices, what must they do to break even? If the same company is selling the product at break-even point are they really breaking even? What costs may not be covered?

Solution

The company can either reduce its variable cost to increase the contribution per unit or they should the unit sales to break even.

Break even point covers the fixed cost and variable cost of the business but it does not actually covers Interest and tax expense. Therefore It does not actually break even.