What assumptions are made when using break-even analysis?

What will be an ideal response?

Break-even analysis is useful to evaluate new or existing products or services and to compare production methods; however, decision makers who use this model make assumptions. Typically, single values are provided for fixed and variable cost and for revenues. This results in wonderfully straight lines that do not reflect realities such as start-up costs, economies of scale, price breaks offered to volume purchasers, and diseconomies of scale.