Describe how Sensitivity Analyses interact with Break-even Analyses.
Break even point
Break even quantity = Fixed costs/Contribution per unit
Here contribution per unit= Sales per unit -Variable cost per unit
Break even point is the point at which gains equal losses.
Break-even analysis is basically an analytical technique for studying the relations between:
* fixed costs;
* variable costs; and
Break-even analysis is a device for determining the point at which sales will just cover total costs.
or the break even point for a product is the point where total revenue received equals total costs (TR=TC). A break even point is typically calculated in order to determine if it would be worthwhile to sell a proposed product, or to try to figure out ...
The solution discusses the relationship between sensitivity and break-even analyses.