Question

For this discussion, I'd like you to give me a real life scenario where you either have used or have been involved in others using one of the tools discussed above. If you have yet to ever see or use break-even, target profit analysis, margin of safety, degree of operating leverage, sales mix, etc., you may well be in the majority and not the minority, and that's OK. Instead then, think of a scenario that you could have applied these concepts to from your real life and discuss what that might have looked like. As an example...if you delivered pizza one summer, you incurred fixed costs and variable costs you had to cover for your job. You could prepare an analysis to determine break-even for wages or wages to earn a target income, etc. What would be the components of such an analysis?

Answer 1