Problem 1: Discuss and give examples of the following formulas that are used in breakeven analysis:
Contribution Margin Method - Breakeven in Units and Breakeven in Sales Dollars.
Targeted Profit Analysis - Targeted Profit in Units and Targeted Profit in Sales Dollars.
Margin of Safety - Margin of Safety in dollars and Margin of Safety Percentage.
Problem 2: How is Breakeven Analysis beneficial to Management and Planning? Is Breakeven Analysis very useful in sensitivity analysis? Discuss Operating Leverage. Is there any relationship between Breakeven Analysis and Operating Leverage? Discuss.