4. break even analysis
TRANSCRIPT
Break-even analysis
Specification detail
• Including calculating break-even point and safety margin; how changes to price and costs affect the break-even point;
• The value to business of using break-even analysis
Downturn: Here
• In break-even analysis, margin of safety is the extent by which actual or projected sales exceed the break-even sales.
• If you know how much output is being sold, what is the value between the Breakeven point and the actual output level.
Features of a Break Even GraphCosts/Revenue
Jackets
500
1000
1500
2000
2500
3000
025 50 75 100 125 150
Break- even
Revenue is the same as Sales
Total Costs
Fixed Costs
75 Jackets
LOSS
PROFIT
Actual output level
Margin of safety
Variable Costs