3.3 Break-Even Analysis

Assesment Objectives
Total contribution versus contribution per unit	AO2
A break-even chart and the following aspects of break-even analysis: Break-even quantity Profit or loss Margin of safety Target profit output Target profit Target price	AO2, AO4
The effects of changes in price or cost on the break-even quantity, profit and margin of safety, using graphical and quantitative methods	AO2, AO4
The benefits and limitations of break-even analysis	AO3

• Breakeven Analysis Calculator – a simple to use break-even calculator with definitions of important terms.

• Finance – fixed and variable costs and break-even and the relation to the P&L explained through an example.

• Use This Formula to Calculate a Breakeven Point – a quantitative method to break-even explained through an example.

• How to Do a Breakeven Analysis – the connection to pricing strategies and outlines some limitations of this tool.

• Operations: Introduction to Break-even Analysis – an introduction to break-even analysis.

• Limitations – the limitations of break-even analysis.