Hello everyone, in this video we will
learn how to do a break-even analysis using a financial calculator. The
financial calculator we'll be using is Texas Instruments BA II Plus. So in this problem,
the company sells webcams for $85 each. $85 is the selling price and selling
price in the calculator is represented by P. The company's fixed costs per
periods are $18,500. The fix cost in the calculator is represented by FC. The
variable cost per unit is $35, so our VC is 35 and then we're looking
for the number of webcams or the number of units or quantity the company needs
to sell in order to break-even.
So the first step is to go to Break-even
worksheet in order to go to Break-even worksheet ,we need to press 2nd and then
we press number 6 Break-even worksheet is the secondary
function on number 6, so now we are in the sheet
now before we entered the values we need to clear the sheet ok
so we press 2nd and then we press clear here. Now all the variables are set to 0.
Now we start entering the values. So the fixed cost is 18,500. We type in 18 500
and then we press Enter. Now if we use the down arrow key here to go to the
next variable, which is variable cost per unit. Variable cost per unit is $35. We
type in 35 and then we press ENTER. Again, we use the down arrow key to go to this
next variable, which is P or selling price.The selling price per unit is $85,
so 85 and we press Enter. Next we move on to the PFT.
PFT represents the profit. At break-even profit is zero therefore we could make sure
that profit is set to zero. Okay? When you clear the worksheet, the profit will be
set to zero anyway but it is good to make sure that this is zero. Now we
move on to the last variable, which is quantity. Quantity is represented by Q
and this is what we're looking for it is that's a number of units of webcam in
this example. So we press Compute. There you go that's 370. Therefore, the company
needs to sell three hundred and seventy webcams in order to break-even..