• A stopping point is the level of operations at which the company does not benefit from continuing operations and therefore decides to close temporarily, and in some cases permanently.

  • A breakpoint occurs as a result of the combination of output and price, when the company earns enough revenue to cover its total variable costs.
  • Cut-off points are entirely based on determining at what point the marginal cost associated with a job exceeds the revenue generated from those operations.
  • When a company can earn a positive contribution margin, it should continue to operate despite total marginal loss.