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# Using Breakeven Analysis in Decision Making

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How could breakeven analysis be applied to the decision making process involved in introducing a new service? Are there any constraints to using this method to make a decision regarding the implementation of a new service?

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Breakeven Analysis:
The breakeven point shows where cost or expenses and revenue are equal.
The breakeven point is where Price x Units Sold=Total fixed Cost + (Variable Costs x Units sold).
Therefore were Total Revenue=Total Costs.

In breakeven analysis, you graph the "Revenue Curves" at different prices against the "Total Costs Curve". The intersection between each revenue curve and the "Total Cost Curve" is the breakeven point.

You could use breakeven analysis in the process of introducing a new service, by analyzing how many customers you will need at different price points. Then determining if you believe you can ...

#### Solution Summary

The expert determines how breakeven analysis can be applied to the decision making process involved in introducing a new service. A reference is provided.

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