 लेग of, वी आश़्र, इस भी भी ईसाच्फ़ोए मनब मैगगर आत वी बाशा, वी आश़्र, वी अवशाट अग आवशाटा। इसके अंदर ब्रेकिवन अनलिसिज यस बेसिकली अटेक्नीग, for evaluating process and equipment alternatives के यह इसके जर यह हम कुझन सा प्रोसस यूस करें, कुझनसा अल्ट्रनेटिप एक्वन्त अल्ट्रनेटिप यूस करें कि दिप मारा ब्रेकिवन point के होगा उसे जेआदा अगर मारी दिमान जारी है त तो आप लिए लिए मैं ब्रेकिवन कर सक्ट हैं, बेसिकली अप्टेक्टेव is to find the point of जिसको हम क्याते है त होई गे उख़े some of the fixed cost, which we use in the calculation of our break even analysis. Then there is variable cost. Variable cost varies basically with the number of units produced. Our assumption is that there is labour, direct labour, material, some portion of utilities which are directly used in production caves, then that is considered in the variable cost. Contribution margin is basically the difference between your revenue and the variable cost. Or we can say selling price and the variable cost per unit. The difference between the units is called contribution margin. Why? Contribution margin because it contributes towards the fixed cost. To handle fixed cost, to reduce fixed cost, we use this contribution margin. Then when your contribution margin increases from fixed cost, we say that we have gone into profit. So these are some of the different costs and contribution margin. Now there are assumptions which we assume in this case in the break even analysis. We call them simplifying assumptions. Why? Because the model is simplified and the complicated model is not there. The more the complication is created, the more difficult it will be to solve. So there are assumptions that cost and revenue are linear functions which in actual reality is not true. Costs are non-linear but here we considered it as linear again. To be able to solve this model easily. Then we can say that we actually know these costs which again is not true. For example, there is some portion of fixed cost which can be a variable. There is some portion of variable which can be fixed. If we are costing based on activity, then maybe we can get better cost but still we have to accurate 100%. It will be very close to accuracy. So we actually do not know these costs exactly. And then assumption is there is no time of money. But if we actually look at it, in today's times there is time of money. Like interest payment and all these things come. Depth is based on inflation and other things. Yes, there is a value of money based on time. Now if we look at it, then in this red line you can see this shows the fixed cost. In this we add per unit variable cost. If we add 100 units then cost has increased. And this blue line is total cost line which is fixed cost which is in this case $200 fixed cost. And if we add variable cost then total cost line. Although it is showing linear increase. But actually it does not happen. But for this model we need that. So that increase and this total cost is also included in this total cost. So this is a single product case study of break even analysis. This line is showing total revenue. This point is where total revenue and total cost are equal. So this is the break even point. This is the break even point where both cost and revenue are equal. This will show more revenue and we will go into profit which is shown by yellow color. And if it is below this then we will be in loss. So this break even point to determine becomes extremely important. So that we know how many units we will have to sell to achieve profit. If we look at this, let's suppose BEPX is break even point in unit. BEP dollar is break even point in dollar terms. P is price per unit. All the discounts which are taking price per unit is this price. X is number of units produced. VR is total revenue which is your price multiplied by number of units produced. So that becomes F and V are fixed cost and variable cost respectively. And TC is total cost which is fixed cost plus variable cost multiplied by X. Because this is your variable cost per unit. So this basis if we look at break even point occurs when your total cost is equal to total revenue in this case. And if we expand this further then total revenue is PX and total cost is F plus VX which is given here. So if we expand this further then X will become break even point with respect to the number of units is given as F over P minus V. Where this P minus V is your contribution margin. Now if we look at this in terms of dollar then how will we find that dollar? There is one way that we have done in break even point units. We multiply it with price. So you will get break even point in dollars. If you want to do it directly then solve it further. Break even point in units is given by F over P minus V And if we multiply it with P then break even point in dollars will be given. If we solve it further then if we take P down in denominator then it will be divided. So you will get F divided by P minus V divided by P. And further if we do this then it will be F divided by 1 minus V over P. We have divided P from P or P1 minus V over P. So this is in break even point in dollars. If we look at profit then profit is basically total revenue minus total cost. And on its basis it is equal to total revenue is PX. Whereas total cost is F minus VX. If we take this on one side then we will get PX minus F minus VX. And if we solve this then profit in this case is P minus V into X minus F. So this is basically break even analysis. If we calculate this in units or in monetary terms then we use different formulas.