1. A what level of production does the business start to make a profit?
Break-even analysis
A what level of production does the business start to make a profit?

2. Example Snoodles are sold for a price of $4 each.
The variable costs of producing 1 snoodle is $2.4
The total fixed costs of the business amount to $25,000
The business currently makes and sells 17,000 snoodles.
What is the break-even point?

3. Output TFC ($) TVC ($) TC ($) TR ($) 25,000 17,000 40,800 65,800
25,000
17,000
40,800
65,800
68,000
Total fixed costs are fixed at $25,000
Total variable costs = unit variable cost x quantity produced
Total costs = TFC + TVC
Total revenue = Price x quantity

4. Estimate break-even quantity from graph
Calculate margin of safety
Calculate current profit