Target Profit Pricing With the Web-Based Breakeven Analysis Package

Aspy P. Palia

Abstract


The web-based Breakeven Analysis Package enables competing participant teams to consider cost and demand factors when setting price. Participants set target profit and desired margin or price for each strategic business unit (SBU). The fixed and variable costs are computed based on inputs extracted from the simulation results. Based on these inputs, the unit and dollar sales needed to achieve the target profit at the set price are computed for each SBU. Participants can adjust the desired profit and margin or price until the unit and dollar sales needed to achieve the target profit at the set price are realistic. Cell comments clarify input variables used and calculations made.

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