Breakeven AnalysisQuantitative Tool for Evaluating AlternativesBreakeven Analysis Organizations face Variables Costs (VC). Variable Costs (VC) cange !it te volu"e of #ro$uction% e.g. cost of "aterials or labor. Organizations face &i'e$ Costs (&C). &i'e$ Costs (&C) $o not cange !it volu"e of #ro$uction an$ !oul$ be incurre$ even if no #ro$ucts !ere "anufacture$ or sol$% e.g. (tilities% A$vertising an$ )ales E'#enses% *acinery. +rice (+) #er (nit is te revenue obtaine$ #er unit. (nit Contribution or *argin #er (nit is te $ifference bet!een #rice #er unit an$ variable cost #er unit% i.e. (nit Contribution , + #er unit - VC #er unit Breakeven volu"e is foun$ by $ivi$ing te total fi'e$ costs by te unit contribution Breakeven Volu"e ((nits) , Total &i'e$ Costs(nit Contribution