Break-even Analysis Break-even analysis attempts to determine the volume of sales necessary for a manufacturer to cover costs, or to make revenue equal costs. It is helpful in setting prices, estimating profit or loss potentials, and determining the discretionary costs that should be incurred. The general formula for calculating break-even price is: Break-even Units = Total Fixed Cost/Unit Selling Price - Unit Variable Cost In CountryManager, total fixed costs can be broken into discretionary marketing expenditures (such as sales force and advertising budget) and fixed costs for plant and overhead. The selling price is the MSRP less the volume discount. Unit cost of goods sold and allowance expense plus shipping and tariffs make up the variable cost. This assignment will give you practice calculating break-even units, and using break-even analysis to check your pricing decisions and sales forecasts. Given the data in the following table, calculate the selling price and variable cost for each SKU. Given that the annual depreciation cost for the local plant is $50 million, use the data in the table below to allocate the fixed cost of the plant based on unit sales. Then calculate total fixed cost and break-even units. Amounts (except depreciation) are in local currency; you will need to convert the depreciation to the local currency. (Fill-in chart provided on next page.)