Break-even analysis in practice
Comment on the following scenario :
A survey of management accounting practice in the United States was conducted in 2003. Nearly 2,000 businesses replied to the survey. These tended to be larger businesses, of which about 40 per cent were manufacturers and about 16 per cent financial services; the remainder were across a range of other industries. The survey revealed that 62 per cent use break-even analysis extensively, with a further 22 per cent considering using the technique in the future. Although the survey relates to the US, in the absence of UK evidence it provides some insight to what is likely also to be practice in the UK and elsewhere in the developed world.