This document discusses break even analysis. It defines break even analysis as studying the relationship between selling prices, sales volumes, fixed costs, variable costs and profits at various activity levels. The purpose is to provide an indicator of earnings impact from marketing activities. Key assumptions are that fixed costs remain constant and variable costs are constant per unit. The break even point is where total revenue equals total costs and there is no profit or loss. The margin of safety is the amount sales can decrease before losses occur. Limitations include fixed costs may rise with scale, variable costs may not stay constant, and sales mix may not stay constant for multiple products.