Break-even analysis Essay

INTRODUCTIONEvery comp any(prenominal)(prenominal)s corporate managers deliver a goal of maximizing shargonholder wealth. However, condition that no obvious, single course of action leads to fulfillment of that goal, managers must lease specic course of action and develop plans and controls to pursue that course. Beca c completely planning is coming(prenominal) oriented, uncertainty exists and information helps reduce that uncertainty. Controlling is fashioning actual death penalty align with plans, and information is taked in that process. Much of the information managers habituate to plan and control reects relationships among harvest salute, interchange prices, and sales messs. changing adept of these essential comp onenessnts in the sales mix pull up stakes puddle changes in early(a) components. Foc practice sessions on analyzing how ledger, price, prot helps in predicting emerging conditions (planning) as well as in explaining, evaluating, and acting on p ull up stakess (controlling). in advance generating prot a company must rst reach its break- make up off establish, which circumstanceor that it must generate sucient sales taxation to obscure aggregately bell? .By linking woo behavior and sales lot, managers tush use the break even summary. Information provided by these BEP analyses helps managers focus on the implications that loudness changes would have an carry on on organizational protability compendium. My objective is to analyze the term BEP psycho abridgment in a boarder sense with diametric court concepts and new(prenominal) related matters which be needed to calculate BEP, providing the broad overview ab turn up BEP synopsis and its implication in incompatible aspect, which bequeath ultimately help us to take different management finishs.METHODOLOGYI have placid the information for this term paper intimately BEP analytic thinking by subroutine library work from different books, journals, arti cles, internet browsing, papers of professionals degrees and different BEP practice of different company with on striving logging into their sites.ABSTRUCT come acrosseven heyday abbreviation around convictions c aloneed personify deal- meshwork abbreviation, stresses the relationships between the factors affecting pull ins. Traditional break-even abbreviation is a relatively unwashedalty managerial tool use in a wide-eyed variety of purposes for nearly all types of decision-making. Break-even analysis (sometimes called cabbage contri merelyion analysis) is an eventful tool, which allows comparative studies between appeal, receiptss, and profits (Pappas and Brigham, 1981).This analytical technique facilitates the evaluation of likely prices, the impact of price changes and bushel/ versatile star be on profitability (Powers, 1987). This analysis elicit also be employ to expedite decisions on investment return criteria, necessitate market sh atomic number 1 8s, and distri bution alternatives (Kotler, 1984). Break-even is the sales slew at which revenue and total damage ar equal, resulting in no net income or firing. It is regular(prenominal) to interpretically depict break-even as the destine where a rigids total cost and total revenue curves intersect. This is the sales rouse where both covariant and intractable cost atomic number 18 covered by the sales volume for the pertinent grasp. If the break-even target is non achieved, that business result (or should) eventually go out of business. The breakeven point the profit is zero that is the theatrical role de trapation is equal to the dogged be. If the actual volume of sales is high than the break-even volume there will be profit.FINDINGS BREAK-EVEN analysis DefinitionDetailsBreak-even analysisAn analysis to peg down the point at which revenue received equals the be associated with receiving the revenue. Break-even analysis calculates what is known as a coa st of safety, the pith of money that revenues exceed the break-even point. This is the amount that revenues move fall plot of ground still staying above the break-even point. Investopedia explains Break- even off AnalysisBreak-even analysis is a supply-side analysis that is, it lonesome(prenominal) analyzes the be of the sales. It does not analyze how demand whitethorn be abnormal atdifferent price levels.Moore & jaedickeThe break-even point of the company or a whole of a company is the level of sales income which will equal the sum of its fixed be and its variable cost. These be be also referred to as out of pocket cost and period be.(Source ACCA, paper F, CVP analysis, page 47) ASSUMPTION OF BEP ANALYSISThe break-even analysis is based on the following assumptions 1. Costs segregation It is based on the assumption that all cost pile be segregated into fixed cost and variable costs. 2. ceaseless Selling value The merchandising price remains constant. That is, sel ling price does not change with volume or another(prenominal)(prenominal) factors. 3. Constant repair costs frigid costs are constant, at all levels of activity.They do not change, with change in sales. 4. Constant Variable costs Variable cost per building block is constant. So, variable costs fluctuate, considerly, in parity to changes in volume of output signal. In other words, they change in direct proportion to sales volume. 5. Synchronized output and sales It is assumed overlapion and sales are synchronized. That is, inventories remain the kindred in the opening standard and closing stock. 6. Constant sales mix Only one crop is manufactured. In case, to a greater extent(prenominal) than one harvest-feast is manufactured, sales mix of ingatherings interchange does not change. 7. No Change in operating efficiency on that point is no change in operating efficiency. 8. No other factors The volume of output or output signal is the just now factor that influences the cost. No other factors have any influence on break-even analysis.BREAK-EVEN ANALYSIS COMPONENTSTo fully estimate the break-even theory and related graphical depictions, it is necessary to have a staple fiber understanding related to cost, revenue and profit. In order to facilitate this, one must first know the following components of break- evenTotal cost parcel perimeterTotal revenueSemi variable costs firm costs and variable costsRelative range border promissory note of safetyNet profitSelling monetary value per whole The amount of money charged to the customer for each unit of measurement of a proceeds or service Total cost is the sum of fixed cost and variable costs.Total revenue is that amount of gross income received from product sales or a service rendered, and is equal to the price of a unit times the come up of units sold. Forecasted Net Profit Total revenue minus total cost. Enter Zero (0) if you wish to convalesce out the number of units that must be sold in or der to allege a profit of zero (but will recover all associated costs). Fixed costs These are costs that are the same regardless of how more items you sell. All start-up costs, such(prenominal) as rent, indemnity and computers, are considered fixed costs since you have to coiffure these outlays before you sell your first item. Examples of fixed costs Rent and rates Depreciation Research and development Marketing costs (non- revenue related) Administ symmetryn costsVariable costs These are happen costs that you absorb with each unit you sell. For example, if you were operating a recognize card store where you had to buy greeting cards from a unmoving company for $1 each, then that dollar represents a variable cost. As your business and sales grow, you can begin appropriating labor and other items as variable costs if it makes sense for your industry. strike variable costs are those which can be directly attributable to the mathematical product of a special(a) product or ser vice and al fit(p) to a imageicular cost centre. piercing materials and the wages thoseworking on the production line are proficient examples. Indirect variable costs cannot be directly attributable to production but they do vary with output. These include derogation (where it is metric related to output e.g. machine hours), maintenance and certain labor costs.Semi variable costs often stay constant for a certain time period during production increases, then step up to a higher cost level at specific points of increased volume. An example of this is an insurance premium, which covers production to a certain level, which if exceeded, is changed to a new fixed level. To simplify the analysis process, semi variable costs are generally deliberate and split into appropriate fixed and variable costs.Margin of Safety The margin of safety is the units sold or the revenue earned above the break-even volume. For example, if the break-even volume for a company is 200 units and the compa ny is currently selling ergocalciferol units, then the margin of safety is 300 units (500-200). The margin of safety can be expressed in sales revenue as well. If the break-even volume is $200,000 and current revenues are $350,000, then the margin of safety is $150,000 ($350,000-$200,000). In addition, margin of safety sales revenue can be expressed as a percentage of total sales dollars, which some Managers refer to as the margin of safety dimension.Contribution margin is that amount which contributes to the fixed costs of the company and to its profits, after deducting the variable costs. Total variable costs are subtracted from total revenue to yield the contribution margin. The contribution margin can be expressed in total dollars, in dollars per unit, or as a percentage.Relative range is the limit of production or output levels over which fixed costs remain constant. Above the relative range cost evaluations and respective relationships are no longer applicable. For instance, if a aspect firms work doubled or tripled, the company would have to hire more people, rent more office space, and acquire more equipment thus increasing fixed costs and altering the entire break-even cost and revenue structure.PROCESS OF BEP ANALYSISThere are 3 stairs of BEP analysis these are started after each and every steps is finished. The sequence of the BEP analysis is 1. Conduct a cost/income analysis of the construction firm to determine 1. Fixed costs2. Variable costs3. Total costs4. Total revenue2. Calculate contribution margin and perform break-even analysis (Moore & Jaedicke).Variations of break-even3. Preparing different graphs charts narratives.Cost volume chartProfit volume chartMETHODS OF BEP ANALYSISBreak-even point can be determined by 4 ways with the break-even analysis. These methods are presumptuousness bellow 1. Break-even schedule.2. Break-even charts3. Algebraic command4. Income statement methods5. Linear program. A detail overview has been assum ption about the different methods of the break-even analysis. Break-even schedule we can determine the break-even point with break-even schedule. The procedure of preparing break-even schedule is given follow (with imaginary figure) proceedsionWe can observe the schedule that, when the production and sales is 4000 units then there is no profit and wrong. So in break-even point the sale is 4000units or 40000 taka. Break-even chartsThe break-even point can be presented graphically. The graphic presentation gives a better view of the relationship of cost, volume and profit. graphic presentation gives immediate and clear understanding of the picture. This type of presentation ever impresses the management as it gives instantaneous understanding of the bit The graphical chart of break-even analysis looks like thisBreak-even chartFollowing are the steps mired in preparing break-even chart 1. sales volume is plotted on the plain line i.e. X-axis. sales volume whitethorn be expres sed in terms of units, taka or as a percentage of capacity. 2. Vertical line i.e. Y-axis is used to represent revenue, fixed costs and variable costs. 3. Both even and vertical lines are spaced, equally, with the same distance. 4. Break-even point is the point of intersection between total cost line and sales line. 5. Sales revenue at the break-even point can be determined by drawing a perpendicular line to X-axis from the point of above intersection.6. Total sales line and Total cost line intersect forming an angle known as Angle of Incidence.Break-even with profit volume chartProfit-volume graph visually portrays the relationship between profits operating income and units sold. Prot -volume (PV) graph provides a depiction of the amount of prot or loss associated with each sales level horizontal, or x, axis on the PV graph represents sales volume the vertical, or y, axis represents dollars of prot or loss. Amounts shown above the x-axis are positive and represent prot amounts show n at a overturn place the x-axis are blackball and represent losses. deuce points can be located on the graph total xed cost and break-even point.Total xed cost is shown on the y-axis below the sales volume line as a negative amount. If no products were sold, the xed cost would still be incurred and a loss of that amount would result. Location of the BEP in units may be determined algebraically and is shown at the point where the prot line intersects the x-axis at that point, there is no prot or loss. Amount of prot or loss for any sales volume can be hit the books from the y-axis. Slope of the prot (diagonal) line is determined by the unit contribution margin and the points on the line represent the contribution margin earned at each volume level. Line shows that no prot is earned until total contribution margin covers total xed cost.The profit-volume chart is simply the conventional break-even chart re-arranged to show changes in profit or loss which occur through volume chan ges either of sales or output. It is less detailed since it does not show separate curves for costs and revenues, but its virtue lies in the fact that it reduces any changes down to both trace elements-volume and profit. For this yard, the volume-profit chart is useful for illustrating the results of different management decisionsBEP Analysis with Algebraic orderSingle product BEP equationsBreakeven Point =Fixed Costs / (Unit Selling Price Variable Costs) Breakeven Sales Point =Fixed Costs / (1 (Variable Costs Unit Selling Price)) Breakeven Point=BEP (sales value in taka)/ sales in units Breakeven Point( in taka)=(Total fixed cost/CM per units)* Unit sales Break-even Sales (in taka) = Price per Unit Break-even Sales Units The formula to calculate the breakeven point in units is= Fixed expenses + operating income Unit contribution marginThe formula to calculate the breakeven point in dollars is= Fixed expenses + Operating income Contribution margin ratio Or=Target Profit Poi nt in Units=Multiple product BEP analysisBreakeven Point in Units=BEP Analysis with income statement methodBreakeven can be computed by using either the income statement approach or the contribution margin formula approach. With the income statement equation approach, breakeven sales in units is calculated as follows = (unit sale price x units sold) (variable unit cost x units sold) fixed expenses = operating income (solve for units sold to get breakeven unit sales). At the breakeven point, a sale minus variable expenses equals fixed expenses (there is no operating income at breakeven). So we can show the statement for BEP analysis with imaginary figures Income statement (for BEP)DescriptionsTakaSales (at $16 per Unit)Less Variable Costs (at $12 per Unit)Contribution MarginLess Fixed Costs3,840,0002,880,000960,000960,000Operating Profit0,000The detect figure indicating that contribution margin is 960,000 is equal to the fixed cost 960,000. So it has fulfilled the condition of bre ak-evenpoint at 24,000 units of sales.Break-even point analysis with analogue program method (multiple products) With the use of linear programming, break-even analysis proves to be untold more useful. In fact, linear programming stretches the CVP relationships inherent in BP analysis into a fairly realistic quantitative approach to the incremental cost and revenue concept of microeconomics. There is no doubt that more businessmen and count onants will begin to consider the possibility of using LP to express CVP relationships and to submit the optimum gang of costs, volumes, profits. whizz need not worry about the size of the equations or the numbers of equations since computers are readily available to use the simplex method of solving linear equations. Furthermore, there is the possibility that the number of factors and equations could be loss in some situations. The process of BEP analysis in LP is following Objective function maximization or minimization. overlapion constr aints determination.Sales constraints identification.Non negativity constraints.The objective function represents the fact that we are seeking the combination of products which when multiplied by their respective profit contributions will maximize the total profit contribution and thus profits. The constraints represent the facts there are limits on the available combination of products. A sales constraint indicates the upper limits of possible sales and production constraints indicate upper limits of production possibilities. Linear programming method is applied to the study of a real case in a small enterprise. The characteristics of this method are to make it necessary to use integer linear programming. Cash break-even point analysisMany a time, it is difficult for the industrial units to reverse break-even in the initial years. From that environment, the concept of cash in-breakeven point has emerged. The Cash break-even point may be defined as that point of sales volume, whe re cash revenues are equal to cash costs. In other words, if we eliminate non-cash items from revenues and costs, the break- even analysis on cash basis can be computed. Depreciation is, generally, a fixed cost. However, when whole shebang and machinery is used for special shifts, the supererogatory depreciation is a variable cost. Reason for treating the additional depreciation as variable cost is the firm can avoid additional shift, at any time, and in such circumstances this cost would not be incurred. To calculate cash- breakeven point, depreciation is to be removed from fixed costs. extra depreciation, component, treated as variable cost, is also to be excluded from variable costs. Similarly, deferred expenses are to be excluded from the fixed cost. Thus, cash-breakeven point may be calculated as belowCash Fixed Cost Cash break-even Point (in terms of units) =Cash Contribution per unitBREAK-EVEN ANALYSIS FOR PARTS OF THE FIRMOne can use break-even analysis for parts of the firm by recognizing the fact that many firms are multiproduct, multiplant, and multi dominion operations. In recognizing these complexities of modem-day business activities, the problems of cost allocation are quickly brought to the fore. Substantial amounts of factory overhead, distribution costs, and administrative costs are not traceable to individual products, product lines, manufacturing plants, and even sales territories. These no traceable costs are normally fixed costs such as factory administrative costs and general administrative costs. In order to illustrate the consequences of nonallocation of common fixed costs, the following types of companies will be consideredOne productone plant twain productsone plantOne producttwo plantsTwo productstwo plantsOne productone planttwo territoriesTwo productsone planttwo territoriesTwo productstwo plantstwo territories.One Product-One Plant CompanyIn a company such as this, all costs are traceable to the product and to theplant. Thus there is no problem of allocation. With the facts given le1ow, the contribution per unit and break-even point can be calculated as shown (with imaginary figure)Fixed costs $265,000 Variable costs $4.00 per unit Sales price $8 .50 per unit Contribution per unit = $8.50 4.00 = $4.50 Break-even point = = 58,888 units. Two Product-One Plant CompanyIn a two product-one plant situation, some costs will not be traceable to products. These are the common fixed costs. The fixed costs which are traceable to each product can be described as direct fixed costs. With the entropy given, break-even calculations can be made as shown below.Break-even informationDescriptionsProduct AProduct BDirect fixed costs.Variable costs.Sales prices.. car park fixed costsBreak-even pointProduct AProduct BContribution per unit..Break-even to cover direct fixed costs.Two Product-Two Plant CompanyIn a more complex situation with two products and two plants, there arise triad layers of common fixed costs. These layers represent the costs common to products A and B in plant I and in plant 11 and the costs common to the entire operation of all products and all plants. Below are shown break-even data and break-even calculations to illustrate the two producttwo plant situation. Break-even DataDescriptionsPlant IPlant IIProduct AProduct BProduct AProduct BDirect fixed costsVariable costs per unit.Sales prices per unitFixed costs common to products. Fixed costs common to total operationsBreak-even CalculationsDescriptionsPlant IPlant IIProduct AProduct BProduct AProduct BContribution per unit.Break-even to cover direct fixed cost..One product one PlantTwo Territory CompanyWhen sales territories are considered in a break-even situation, there aulses the possibility of fixed costs common to the sales territories as well as the possibility of dealing with variable costs segregated by sales and production. DescriptionsEastern stain HesperianterritoryPlantDirect fixed costsVariable costs per unit s. Sales prices per unit roughhewn fixed costsCommon to both territoriesCommon to all operations..Break-even Calculations DescriptionsEastern territoryWestern territoryContribution per unit (sales price minus all variable costs). Break-even to cover direct fixed costs of eachTerritoryTwo Product-One PlantTwo Territory CompanyThe two product-one planttwo territory situations are very similar to the preceding illustration. Actually, the only differences are the extra layers of common fixed costs.DescriptionsEasternterritoryWesternterritoryPlantProduct AProduct BProduct AProduct BProduct AProduct BDirect fixed costsVariable costs per unit.Sales prices per unit.Common fixed costsCommon to Products.Common to territory..Common to all operationsAPPLICATIONS OF BEP ANALYSIS IN SERVICE INDUSTRIESWhile many of the examples used have assumed that the producer was a manufacturer (i.e., labor and materials), break-even analysis may be even more important for service industries. The reason for this lies in the basic difference in goods and services services cannot be placed in inventory for later sale. What is a variable cost in manufacturing may necessarily be a fixed cost in services. For example, in the restaurant industry, unknown demand requires that cooks and table-service force be on duty, even when customers are few. In retail sales, clerical and cash register workers must be scheduled. If a barber shop is open, at least one barber must be present. Emergency live require round-the-clock staffing. The absence of sufficient service personnel frustrates the customer, who may balk at this visit to the service firm and may find competitors that fulfill the customers needs.The wages for this basic level of personnel must be counted as fixed costs, as they are necessary for the potential production of services, despite the actual demand. However, the wages for on-call workers might be better classified as variable costs, as these wages will vary with units of production. Se rvices, therefore, may be burdened with an extremely large ratio of fixed-to-variable costs. Service industries, without the luxury of inventor able products, have developed a number of ways to provide flexibility in fixed costs. Professionals require appointments, and restaurants take reservations when the customer flow pattern can be predetermined, lavishness personnel can be scheduled only when needed, reducing fixed costs. Airlines may shift low-demand flight legs to smaller aircraft, using less sack and fewer attendants. Hotel and telecommunication managers advertise lower rates on weekends to good-tempered demand through slow business periods and avoid times when the high-fixed-cost equipment is underutilized. Retailers and banks cutting off customer flow patterns by day and by hour to recruit their short-term scheduling efficiencies.Whatever method is used, the goal of these service industries is the same as that in manufacturing reduce fixed costs to lower the break-eve n point. Break-even analysis is a simple tool that defines the minimum quantity of sales that will cover both variable and fixed costs. Such analysis gives managers a quantity to compare to the forecast of demand. If the break-even point lies above anticipated demand, implying a loss on the product, the manager can use this information to make a variety of decisions. The product may be discontinued or, by contrast, may receive additional advertising and/or be re-priced to invoke demand. One of the most achievementive uses of break-even analysis lies in the recognition of the relevant fixed and variable costs. The more flexible the equipment and personnel, the lower the fixed costs, and the lower the break-even point. (Source www.assignmentpoint.com)CVP ANALYSIS VS BEP ANALYSISCVP analysis is the boarder sense but BEP is the part of the whole system of CVP analysis. CVP analysis is differ from BEP analysis since former takes into account the amount of profit earned by a concern at present level of output and sales. But there is also those who sense that BEP analysis is just another name of CVP analysis. There are others who bump that BEP analysis is appropriate up to the point at which costs become equal to revenue and beyond this point, it is the study of CVP relationship. CVP is not static but BEP is fundamentally a static analysis the graph and charts are used can be changed with management decisions. The purpose of CVP analysis is to examine the rig of change in costs, volume, and price on profits. This is a comprehensive study. Break-even analysis is a part of CVP analysis.CHANGES IN BEPThere are 5 common reasons of changing in BEP analysis. These are given bellow 1. If there is any change in variable cost P/V ratio and BEP also changed. 2. If there is change in sales price of the product then the BEP also changes. 3. If sales mixed is changed than the P/V ratio & BEP changes. 4. If fixed costs changes the P/V ratio is not change but BEP ratio chan ges. 5. If the variable costs and fixed costs change at a time and in the same concern than the BEP also changes quickly.(Source Marginal be- CVP analysis by Prof. Mukbul Hossen)USES OF BEP ANALYSISBreak even analysis enables a business organization to Measure profit and loss at different levels of production and sales. T o predict the effect of changes in price of sales. To analysis the relationship between fixed cost and variable cost. To predict the effect on profitability if changes in cost and efficiency. The break even analysis has different application in the business. In planning stage, the analysis is used in sales projection to determine how many units will have to be sold for the company to cover the cost associated with the production. Sales above breakeven point will results into profits. The analysis can be used by financiers to access the viability of business by accessing the units required to be sold before turning the venture into profitable business. Breakeven p oint can also be used by investors to determine the selling price of an investment at price which will not result into loss collectable to the sale of investments.LIMITATIONS OF BREAK-EVEN ANALYSISDespite many advantages, break-even analysis and charts suffer from the following limitations 1. Number of Assumptions Break-even analysis is based on some(prenominal) assumptions and they may not hold well, under all circumstances. Fixed costs are presumed to be constant, irrespective of the level of output. It does not happen. When the production increases, above the installed capacity, fixed costs change as new plant and machinery has to be installed for increased production. Variable costs do not vary in direct proportion to the change in volume of output, due to the laws of decrease returns. Selling price that is supposed to be constant also changes due to increased competition. 2. Application in Short Run Break-even analysis is a short run analysis. In long run, the cost analysis m ay not hold good as the assumptions may vary and situation may be, totally, different.3. Applicable in Single Product line This analysis is applicable for a single product only. If break-even point for each product is to be calculated, fixed costs have to be allocated to different products, which is a practical problem in the real life. Otherwise, BEP for the overall firm only is possible to calculate. 4. No Remedial Action It does not suggest any remedy or action to the management for solving the problem. 5. Other Factors treat Other important factors such as amount of investment, problems of marketing and policies of disposal influence the problem. Break-even analysis does not consider them. This analysis focuses only on cost volume profit relationship. 6. Limited Information Break-even charts provide restrict information. If we want to study the effects of changes in fixed costs, variable costs and selling prices on profitability, a number of charts have to be drawn. It become s rather more complicated and difficult to understand. 7. Static View More often, a break-even chart presents a static view of the problem under consideration. outcome This term paper is introduced on basics of economic break-even analysis. There are two primary beneficial uses for break-even analysis. These include techniques in company evaluation of desired profit levels and cost reduction impact analysis.Also, the decision making process can be enhanced by using break-even analysis in combination with other analytical tools such as Break-even neglectfulness Ratios, graphical, linear programming, income statement method (a sensitivity analysis on the limit of decreasing unit prices) and Degree of Operating Leverage (analysis on how a change in volume affects profits) for both single and multiple products. comprehension of these tools to the BEP analysis in companies for business position and profitability analysis avail in enhancing the critical thinking process. It also provi des these future managers of manufacturing and service with another tool to produce safe and sound managerial decisions, a typical requirement of graduate level students entering the workforce needed in the critical analysis of the connection between theoretical knowledge and with practice. though the BEP analysis has the different limitation but it is widely using in managerial decision making.REFRANCES i. Marginal costing cost volume and profit analysis Cost and commission account, by Prof. Mukbul Hossen. ii. Cost volume and profit relationships Management Accounting by Moore & Jaedicke. iii. Break-even analysis Management Accounting by L. Wayne. Keller. iv. Cost accounting principles& practice by S.P. Iyanger.v. Management Accounting by Garrison. Noreen, Brewer.vi. Practical Business Application of Break Even Analysis in Graduate Construction Education by Charles W. Berryman, PhD. journal of Construction Education Spring 1999, Vol. 4, No. 1, pp. 26-37. vii. Experience mana gerial decision by Boyne Resorts.viii. Break-even analysis by Jon Wittwer.ix. Break-Even Analysis and Forecasting by Professor Hussein Arsham. x. Break-Even Point and Cost-Volume-Profit Analysis chapter 9, page 381 xi. Accounting for manager, costing for decision making , chapter 18, page 429 xii. How to Do a Breakeven Analysis Breakeven analysis helps determine when your business revenues equal your costs by Daniel Richards xiii. Importance of Break Even Analysis by Kaveh M, Thursday, January 05, 2012 xiv. Break-even analysis Business plan template. www.Google.com xv. ACCA, penning F. Cost and profit volume analysis. Page 47. xvi. Student accountant issues 14/2010. ACCA .paper F5.