VOLUME ANALYSIS

                                              FC + IBT

Required Volume Q=       CMUBreak-Even: BE= FC/CMU

CMU = SP - VC Multiple Products: CM%=(S-VC)/S

IBT = NI / (1-Tax Rate)

UtilizationBreakeven Utilization: BU = BE / C

C="Capacity"Required Utilization: RU = Q / CExpected Utilization: EU = EV / C

EV=Expected VolumeCommon values:

BU = 50-60% RU = 70-80% EU = Initially > RU or busted.

OperationsOperationsOperating Leverage: OL = CM / IBTMargin of Safety Ratio: S = (EV -

BE) / EV

Inverse of each other.Common Values OL about 4. S = 25%