Question:
Question 1- Choose any industry and an organization (exception of Starbucks and Mcdnalds) within industry with which you are familiar. Using this organization as your example calculate the break-even point both in $ and unit terms, graphically and using equations.
Question 2- Highlight the assumptions re the revenue and cost elements of the break even analysis. What assumptions and calculations have you made and why you have made these assumptions. i.e., explain and justify them.
Question 3- Describe the practical and theoretical limitations of using break even analysis in a real business setting, particularly highlight their challenges of using break even analysis and as regular management tool to enable management to make decisions.
Question 4- The recent dramatic fall in oil prices in global markets and resultant impact on oil sector businesses in Alberta has been well documented and publicized. Using this recent fall in oil prices, describe how management might use "break even charts" to educate one of the following groups about the impact on their business. 1) Their staff, 2) the federal government, 3) Their shareholders about the implications for the company in the "new normal" of oil prices in the 40 to 50 range.
Question 5- When faced with a dramatic change in a business sector; describe how management might use break even charts to inform themselves of what actions might take to address this challenge.