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Welcome. In this video Ill be constructing a Break-Even chart using the given information. First we find the breakeven point in units by dividing the fixed cost by the contribution margin. And that gives 45. The Break-Even Point in dollars can now be found by calculating total revenue at Break-Even. And that gives 2700. To construct the graph, we plot units on horizontal axis and dollars on the vertical. Now suppose for the units, we have capacity of, say 110, then we can go as far as maybe 120 -as far as we capture the break-even unit of 45 centrally. And for dollars, I can do a thousand per unit here to ensure Break even dollars of 2700 is captured. So the break-even point here is (45, 2700). Now the fixed cost is the same for any production volume so we draw a horizontal line for the fixed cost here at 1575. For the total revenue function, we know that if we sell zero units, total revenue will be zero. So Total Revenue line is satisfied by (0,0) and will pass through the break-even
