Summary

Break even analysis looks at the output required for the firm to cover all costs

Three methods of break even analysis: equation, chart, graph

Break even allows you to look at the impact of a change in the business environment

Contribution: total revenue – variable costs

Firms can use contribution costing and pricing methods to attempt to increase profitability

Special order decisions  ook at how firms decide whether to accept orders that are out of the ordinary, need to consider contribution and additional factors