Unit 5.5 - Break-Even Analysis
What you need to know and understand:
- Total contribution versus contribution per unit
- A break-even chart and the following aspects of break-even analysis.
- Break-even quantity/point
- Profit or loss
- Margin of safety
- Target profit output
- Target profit
- Target price
- The effects of changes in price or cost on the break-even quantity, profit and margin of safety, using graphical and quantitative methods
- Limitations of break-even as a decision-making tool
Conceptual Understandings:
- Change in operations impacts other business activities
- Creative production process can disrupt the market
- Operational business changes may affect its ethical stance
- Sustainability ensures efficiency in business operations
Questions to consider:
- To what extent are our ideas dependent on our interactions with other people?
- To what extent can the human sciences provide accurate predictions?
- How might the methods used in R&D be limited by ethical considerations
- Should we hold companies responsible for the applications of products they create?
- Are there new ethical challenges emerging from the increased use of data analytics in business decision-making?
- To what extent do the classification systems we use in data analytics affect the conclusions that we reach?
- How might personal prejudices, biases and inequality become “coded into” customer loyalty programs?
- To what extent is big data changing what it means to know your customers?
- Does artificial intelligence allow knowledge to reside outside of human knowers?
- What are the moral implications of possessing large amounts of information about consumer behavior?
TEXTBOOK unit 5.5
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