Abstract
The break-even point is an important tool of financial management. In this article I will describe a concept and basis for analysis that is quite different from the usual technique. In order to determine the portion of each expense that is fixed and the portion that is variable, which is the basis for calculating the break-even point, we will use linear regression analysis, a technique based upon the relationship between two variables. Detailed monthly operating statements are required for a complete departmental analysis using this technique; however, for the purpose of this article I have taken a shortcut and used only monthly sales and operating expenses. The amounts are taken from the monthly operating statements of a 352-room suburban hotel.
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