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The video tutorial explains how to calculate the break-even point for a business using words, graphs, and formulas. It defines the break-even point as the sales volume where no profit or loss is made, or where contribution margin equals fixed costs. Contribution margin increases with each unit sold, and it is calculated as revenue minus variable costs. Fixed costs, such as rent and depreciation, remain constant regardless of units sold. The break-even point is where these two costs intersect on a graph, indicating the point where the business becomes profitable.
