1. Break-Even Output:  = 0 Total Revenue = Total Cost (= Fixed + Variable Cost) PQ* P: Price UC: Variable Cost per Unit Profit (  = Total Revenue – Total Cost = F + (UC)Q* PQ* - (UC)Q*= F (P - UC)Q*= F P - UC: Gross Margin Q* = F (P - UC) F = Lt10.000P = 20 Lt/kg UC = 15 Lt/kilo Q* = 10.000 (20 - 15) = 2.000 kg Example: BREAK-EVEN ANALYSIS    

2. Output (Q) Litas Total Revenue Total Cost Total Fixed Cost Q* F Break-Even Output P: Price = F + (UC)(Q) UC:Variable Cost per Unit = (P)(Q) QoQo  <0  Profit (  = Total Revenue – Total Cost  >0 QoQo

3. Profit Contribution = Profit Volume – Specific Program Costs  C = [(P-UC)/P] S – SPC = [.25]S – 2.000 S* = SPC (P-UC)/P S* = 2.000 (20 - 15)/20 = Lt8.000 PROFIT-CONTRIBUTION & BREAK-EVEN Profit Volume =  V = (P)Q - (UC)Q = (P – UC)Q Sales = (P)Q   V = (P – UC) S P If P = Lt20/kg UC = Lt15/kg SPC = Lt2.000   V = [(20 – 15)/20]S = [.25]S

4. PROFIT-CONTRIBUTION & BREAK-EVEN Profit Contribution (Litas) -2.000 Sales Volume/week (Litas) CC 8.000 0 =[.25]14.000 – 2.000 = 1.500 14.000 1.500  C = [.25]S – 2.000 S* S* = [2.000]/.25 = 8.000

5. PROFIT-CONTRIBUTION & BREAK-EVEN Profit Contribution (Litas) -2.000 Sales Volume/week (Litas) CC 8.000 0 =[.33]14.000 – 2.000 = 2.620 14.000 1.500  C = [.33]S – 2.000 S* S*’ = [2.000]/.33 = 6.061 2.620 C’C’ S*’