Now it's your turn. I'm going to give you the opportunity to determine break even quantity and break even price. How exciting! Let's start with break even quantity. Our first example, Company A sells a product whose price per unit is $1,000, variable cost per unit are $600, and total fixed cost for the year are $1 million. How many units must the company sell to break even? Take a few minutes, give it a try, and then come back, and we'll see how you did. And I'll meet you at the light board. How did your turn go? Let's take a look and see. I've got the facts written up here. We know the price, the variable cost per unit, and the fixed cost for the year. And I've got our handy profit formula written up here. Let's take the facts and plug into our handy profit formula and fill in what we know. We know revenues is equal to price times the number of units and we know the price, so let's put that in. The price times the number of units. I'm going to use Q for quantity just make it easier to write than writing number of units. So the price times the number of units minus, let's see, the variable cost per unit, $600 times the number of units, minus $1 million in fixed cost, is equal to 0, right? That's what we're looking for, we're looking for the break-even quantity. The number of units that we need to make to have this equation be equal to 0. Now just rearrange a little bit. I'm going to take the 1,000 price and the 600 variable cost, and I'll multiply that times the quantity. And that's got to be equal to, I'm going to take this fixed cost to the other side of the equation so that negative becomes a positive. So we're still looking for Q here, and if I move this over to the other side I see that the quantity I'm looking for will be 1,000,000 divided by this $400 here. So what I am trying to do is find out how many of these $400 contribution margin units do I need to sell to be able to cover this $1 million in fixed cost? Well, that happens to be 2,500 units. Okay, perfect.