Quantitative Analysis for Management, 13/e

Key Equations

1. (1-1) $\text{Profit}=sX-f-\nu X$

   where

   • $s=\text{selling} \text{price} \text{per} \text{unit}$

   • $f=\text{fixed} \text{cost}$

   • $\nu =\text{variable} \text{cost} \text{per} \text{unit}$

   • $X=\text{number} \text{of} \text{units} \text{sold}$

   An equation to determine profit as a function of the selling price per unit, fixed cost, variable cost, and number of units sold.

2. (1-2) $\text{BEP}=\frac{f}{s-\nu }$

   An equation to determine the break-even point (BEP) in units as a function of the selling price per unit (s), fixed cost (  f  ), and variable cost ($\nu$).