 In this presentation, we will continue on with our comprehensive problem with break even point calculations last time we took our trial balance, we created a normal type of income statement from it. We then created a contribution margin income statement comparing and contrasting. We hear concentrating on the contribution margin income statement, the one that breaks out the variable and fixed costs. We also took a look at a contribution margin per unit. This is going to be very useful for us for things like forecasting, which we will take a look at shortly. Now we're going to be concentrating on the break even point. So we want to be calculating the break even point, one of the fundamental type of calculations we have for the CVP calculations. So first we'll be considering the break even point in units. So this will be the break even point in units. We'll start off with the fixed costs, the fixed costs. We're going to take that from our data sets. I'm going to say the fixed costs over here from the contribution margin that we have generated is going to be the total fixed costs, the total fixed costs, including all these items, 388,500. So it's going to be our fixed costs. Next, we need the contribution margin per unit, which we've calculated down here. So I'm going to say this equals the contribution margin per unit. I'll make this a little bit larger so we can see this. And that's going to be equivalent to this 117. So there's our contribution margin per unit. And that'll give us our break even point in units. That's what we're looking for. I'm just going to copy this up here. I'm going to paste it 123 without just the values only. And then we'll divide this out. So this is the fixed costs divided by the contribution margin per unit. So this is going to be equal to the fixed costs divided by the number of units, the contribution margin per unit. And that gives us the number of units to break even. In other words, we need to sell the 3321 units in order to cover both the variable costs because we're covering the variable costs here. This is what we're gaining over and above the variable costs with each unit sold. That means that these many units need to be sold in order to reach this dollar amount, the fixed costs, things like the rent and things like all these other items that are included over here in the fixed cost items. Next, we're going to want to know, well, what about how what's the going to be the top line of the income statement in terms of revenue that will be our break even revenue, what is going to be our break even revenue. In other words, two ways we can calculate that if we already have the break even point, we can just take that and multiply it times the amount of the sales per unit. So that's the first way so that would be easy to do and something we would typically just think about doing, considering after we have calculated the break even point in units. I'm just going to say, all right, well, here's the break even point in units. What's going to be our total sales number then well, all we need then is the sales price per unit sales price per unit. And then of course is a given to us that's something we would know. And we have it over here sales price per unit. This is how much we sell each unit for. And then we're going to say that the break even point then break even point. Let's just copy this item again copy this paste it 123 I don't need. We should say in dollars will keep that in dollars don't need the method one multiplying this out. This is how many units. This is how much per unit we sell them for. And therefore the revenue is 946346. Now we can do the same calculation or we can do a similar calculation or get to the same result break even point in dollars with another method. This is going to be the second method to calculate the break even point in dollars will take the fixed cost fixed costs. So that's going to be given to us those are the total fixed costs same as this calculation up top. And we're going to divide that by the contribution margin percentage the contribution margin percent we calculated over here. So I'm going to pull that number I'm going to say this equals that 41 that we calculated which of course is this item contribution margin divided by the revenue that gives us the 41 then divide these items out. We're going to say this equals the 388500 divided by the 41% and that once again is going to give us our break even point in dollars. So that'll be our break even point two ways to calculate that break even point. Next thing we're going to do is we're going to use our information to do what we typically think of with a CVP type analysis we're going to take our information and forecast it into the future we want to think about different scenarios. What if this happens what if that happens into the future that's going to be the forecasting that's what the breaking out between fixed and variable portions really really is helpful with.