What is break even analysis? Explain with examples. Break even analysis is accounting tool to help plan and control the business operations. It is one of the most common tools used in evaluating the economic feasibility of a new enterprise or product. Break even analysis is based on two types of costs that are fixed costs and variable costs. Fixed costs are overhead-type expenses that are constant and do not change as the level of output changes. Variable expenses are not constant and do change with the level of output. Because of this, variable expenses are often stated on a per unit basis