# W2A1 - I chose an article called Break-Even Analysis What...

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I chose an article called, “Break-Even Analysis: What, Why, and How” by Martin, 2014. He begins to explain what the break-even analysis is and why it is so important in businesses. His definition of break-even analysis is a business tool widely used across all industries to evaluate business performance in terms of costs, since this is a supply-side analysis (Martin, 2014). Basically, break-even point can be determined by calculating the point at which revenue received equals the total costs associated with the production of the goods or services. Martin’s formula of break-even point is; Break-even point = fixed costs/ (unit selling price – variable costs) In the South University’s online lectures it states, “The breakeven point is the point when the profit of the company is equal to \$0. Sales = variable costs + fixed costs This article explains a more in depth example of the different types of costs. Including definitions for variable costs, fixed costs, and even revenue. Then Martin discuss how to calculate contribution margin, which I learned this week in my course. With the contribution

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