Break-Even Analysis

A break-even
analysis predicts the sales volume, at a given price,
required to recover total costs. In other words, it’s the sales
level that is the dividing line between operating at a loss and
operating at a profit.

Expressed as a formula, break-even is:

(Where fixed costs are expressed in
dollars, but variable costs are expressed as a percent of total
sales.)

Include all assumptions upon which your
break-even calculation is based.