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A breakeven calculation

You run the case. Read the prompt, answer questions from the notes below, and share data only when the candidate asks for it or gets stuck. Score at the end.

Case timer

00:00

Target length:

1. Read the prompt aloud

Read it slowly, then pause. Let the candidate ask questions before they structure.

Fixed costs are USD 60,000 a year. Each unit sells for USD 25 and costs USD 10 in materials. How many units to break even?

2. Answers to clarifying questions

This case has no scripted clarifying answers. Answer from the prompt, and say "assume what you think is reasonable" if the prompt does not cover it.

3. A model structure

Compare the candidate's structure with this one. A different split can be just as good if it is clean and fits the problem.

Breakeven units = fixed cost divided by contribution per unit
- Contribution per unit = price minus variable cost
- Fixed costs to cover each year

4. The working, step by step

Each step shows how a strong candidate works it out. Share a new fact from it only when the candidate asks or is stuck, and let them do the math: the result in the dark box is what they should reach.

Step 1: Contribution per unit
What a strong candidate does: Each sale brings in 25 and uses 10 of materials, so it contributes the difference toward fixed costs.
Contribution per unit (USD): 25 - 10 = 15
Step 2: Breakeven units
What a strong candidate does: Divide the fixed costs by the contribution each unit gives.
Breakeven units: 60,000 ÷ 15 = 4,000

The recommendation to listen for

At the end, say: "The CEO walks in. What is your recommendation?"

The answer is 4,000 units a year, because each unit contributes USD 15 (a USD 25 price minus USD 10 of materials), and USD 60,000 of fixed costs divided by USD 15 is 4,000. This means every unit above 4,000 adds USD 15 of profit, and every unit below it loses USD 15. The risk is that price or material cost moves, which shifts the breakeven. As a next step, compare 4,000 units with realistic demand to confirm the business can clear it with room to spare.

Score the candidate

Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.

This case has no exhibit. Score Exhibit reading on how the candidate used the data you gave them: did they pick out the number that matters and say what it means?

Structuring

1: No clear structure, or a memorized framework that does not fit the problem.
3: A sensible structure, but with some overlap, a gap, or no clear priority.
5: A structure built for this problem, with no overlap and no gaps, a stated hypothesis, and a clear first step.

Math

1: Frequent errors, no units, or needed heavy help to finish.
3: Right answers but slow or messy working, or one error caught late.
5: Accurate and clearly narrated, with units, a sense check, and what the number means.

Exhibit reading

1: Read the chart aloud without finding the number that matters.
3: Found the key number but gave only part of the so-what.
5: Pulled the right number quickly and said what it means for the case.

Synthesis

1: Summarized what was done, with no clear answer.
3: Gave an answer, but with weak reasons or no next step.
5: Answer first, then two or three reasons with numbers, the main risk, and next steps.

Communication

1: Hard to follow: long silences, no signposting.
3: Clear most of the time, with some rambling.
5: Calm and concise, signposted each step, and checked in with the interviewer.

Total

0 out of 25

Score all five criteria to see the band and the feedback template.