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Breakeven analysis is a financial calculation used to determine the number of products or services a company must sell to cover its costs. Put simply, it's the point at which total revenues equal total costs, and the company neither makes a profit nor experiences a loss. This analysis is vital for any business as it helps in setting sales targets and understanding the impact of different cost structures.

To perform a breakeven analysis, you should first differentiate between fixed and variable costs. Fixed costs are expenses that remain constant regardless of production volume, such as rent or salaries. In contrast, variable costs are those that fluctuate with production output, such as raw materials. Knowing both these costs is essential to find the breakeven point.

Once you are clear about your costs, you evaluate your sale price per unit, which, when multiplied by the number of units sold, will represent your total revenue. By comparing this to your accumulated costs (fixed plus variable), you find the magic number of units that must be sold to hit the breakeven point.

Understanding fixed and variable costs is crucial for any financial analysis, especially when calculating a company's breakeven point. Fixed costs, as mentioned, do not change with the level of production or sales. They are the 'constant' costs of doing business, such as rent, salaries, and insurance. Even if a company makes no sales, these costs still need to be paid.

Variable costs, on the other hand, are directly tied to the business's production level. These include costs like raw materials, direct labor, and utilities associated with manufacturing a product. These costs vary with the volume of production - the more products made, the higher the variable costs. Mixed costs, which have both fixed and variable components, can also exist but typically need to be dissected into their components for accurate analysis.

When you're running a business, keeping both types of costs optimized is important to maximize profits. The lower you can keep your breakeven point through careful management of these costs, the better the opportunity you have to turn a profit sooner rather than later.

To calculate the breakeven sales in units, one simple formula is used: \[\text{Breakeven Sales in Units} = \frac{\text{Fixed Costs}}{\text{Selling Price per Unit} - \text{Variable Costs per Unit}}\]In the context of our given exercise, the fixed costs were established at \(110,000, the selling price per unit at \)20, and the variable cost per unit at $9. With these figures at hand, we calculate a breakeven point of 10,000 units using the described formula:

\[\text{Breakeven Sales} = \frac{\$110,000}{\$20 - \$9}\]
\[\text{Breakeven Sales} = \frac{\$110,000}{\$11}\]
\[\text{Breakeven Sales} = 10,000 \text{ units}\]

It's fundamental to get the breakeven sales calculation right, as it paints a clear picture of what the minimum sales target should be to ensure the business does not lose money. The better you understand your fixed and variable costs, the more accurate your breakeven analysis will be, and the more strategically you can operate your business.