• The costs are toxic to two types:1.

Fixed costs: those related to the

total volume of production, such as (tax costs, overhead costs, and
interest costs).2. Variable costs: they change with the volume of
production, that is, if the volume of production increases, the variable
costs increase, and if the volume of production decreases, variable
costs such as (labour costs, electricity costs, fuel costs, nutrition costs,
treatment costs, and goods costs) decrease.Types of costs:
• The equaliser point can be calculated by the following equation:BEP =
TFC / SUP - VCUPWhere :Equaliser = BEPFixed cost = TFCSales price
per unit = SUPVariable cost = VCUPThe big benefit of analysing the
breakeven point: determining the minimum amount necessary for the
business to prevent losses.The effect of the breakeven point on the
engineering economy:Know the impact of increasing and decreasing
costs on the profits of the organisation.Determine the volume of
production needed to make a profit or avoid loss.Help management
make decisions such as adding a new product or stopping a product
that causes loss.Determine the right time for the investment to
generate a positive return.
• The advantages of breakeven point analysis:Disadvantages of break-
even analysis:Identify the strengths and weaknesses of the
investment project.Determine the amount of financial risk that you
may be exposed to if the project is implemented.Determine the
quantity of production through which profit will be realised or know
the losses.The unreality of the assumptions on which the analyses are
based.It depends on the distinction between fixed costs and variable
costs. Such a distinction is inaccurate. Some costs are difficult to
estimate.
• "Allergy analysis". It is one of the means used in the process of
evaluating investment projects.It means measuring the effects of
changes that may occur in the investment project.Allergy analysis: