Limitations of Break-Even Analysis:
1. The assumption that all costs and revenues are represented by straight lines in unrealistic.
2. Not all costs can be conveniently classified into fixed and variable costs. The introduction of semi-variable costs will make the technique more complicated.
3. There is no allowance made for stock levels on the break-even chart. It is assumed that all units produced are sold. This is unlikely to always be the case in practice.
4. It is also unlikely that fixed costs will remain unchanged at different output levels up to a maximum capacity.