# Break-Even Analysis Data
## For the Reasoning Demo (Task 13)

Present this scenario to the room. Ask Claude to calculate the break-even point.

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## Scenario: New Product Line Decision

Greenfield Manufacturing is considering adding a new product line: custom-machined aluminum brackets for the aerospace industry. The CFO needs a break-even analysis before greenlighting the investment.

**Fixed Costs (Annual)**
- Equipment lease: $180,000
- Additional facility space: $72,000
- Two dedicated operators (salary + benefits): $145,000
- Quality certification (AS9100): $35,000
- Insurance increase: $12,000
- Marketing and sales materials: $28,000

**Variable Costs (Per Unit)**
- Raw aluminum stock: $14.20
- Machining consumables (tooling, coolant): $3.85
- Quality inspection labor: $2.10
- Packaging and shipping: $4.50
- Sales commission (3% of price): variable

**Revenue**
- Target selling price: $68.00 per unit
- Industry standard volume for a new entrant: 8,000-12,000 units/year

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## What to Ask Claude

```
Given the following cost structure for a new product line, calculate:
1. The break-even point in units
2. The break-even point in revenue dollars
3. At the low-end volume estimate (8,000 units), what is the annual profit or loss?
4. At the high-end volume estimate (12,000 units), what is the annual profit or loss?
5. What selling price would we need to break even at only 6,000 units?

[Paste the data above]
```

**Teaching point:** Watch Claude work through the math step by step. It will correctly calculate the sales commission as a variable cost (3% of $68.00 = $2.04), sum the variable costs ($26.69 per unit), compute contribution margin ($41.31 per unit), and divide fixed costs ($472,000) by contribution margin to find the break-even point (~11,427 units).

This is Reasoning. Claude isn't just pulling an answer from memory. It's working through the logic.

**Follow-up question for the room:** "What if I told you the sales commission was 5% instead of 3%? Would you re-run the whole analysis yourself, or would you just tell Claude what changed?"