5.3 Break-even analysis - notes
In previous sections, we looked at production methods and costs and revenues. In this section we will examine the nature of break-even analysis.
By the end of this section you should be able to:
- Use graphical and quantitative methods to calculate the break-even quantity, profit and margin of safety
- Use graphical and quantitative methods to analyse the effects of changes in price or cost on the break-even quantity, profit and margin of safety
- Analyse the assumptions and limitations of break-even analysis
- Calculate required output level for a given target profit or level of revenue