Define breakeven analysis in your own words. When would you most likely use breakeven analysis? Why?

Breakeven analysis is slightly different in the public and the private sector. In the private sector it tends to be focused on production costs in the public sector this is not the case. Remember, sometimes in the public sector the government spends more than the return. For example, a government auditor will tell a program to put procedures in place that eliminate loss even if the policies cost more than the loss eliminated. This is because there is fiduciary responsibility beyond the bottom line in the public sector. In the private sector this would not occur.

So, when answering this DQ please use the public or not for profit sector as the basis for your definition and your example. It will take a bit of thought to accomplish this.

Answer preview

For organizations, break-even Analysis (BEA) is essential as it helps them to evaluate how they are performing. According to Comans, Brauer, & Haines (2009), the break-even analysis is the financial calculation that helps the business entities to determine which point they will start generating profits. It is also used to determine the number of products the company can…

 

(450 words)