Businesses use target profit analysis and break-even analysis to answer questions such as how much would we have to sell to make a profit of $10,000 per month or how much would we have to sell to avoid incurring a loss? You can determine the level of sales needed to achieve the desired target profit using two method methods:

1. The Equation Method

2. The Formula Method

explanation of each method and some examples of fixed expenses used in both methods.