Break Even Analysis Assignme

How Much do we need to sell to Break Ev

Margin

The amount we charge over what we pay.

Markup

The % of what the margin is relative to what we paid

1-(cost/selling price)

Variable cost

1-markup(as a percentage)
What we pay for each unit we sell(dollar amount)

Fixed costs

Costs that do not change regardless of whether we sell anything

Fixed costs per year

Loan to pay computer
Website costs
Total

1000
66
1066
75

Monthly Charge for services

Costs per month to provide service
gas to get there and back

10

margin

Break Even

65.00

16.4

If the service has 50 clients that it does bookkeepping for each month, how much will they earn in 1 y
In Store DVD/CD Shop
Annual Fixed Costs
Rent
payroll
utilities
insurance

24000
16640
6000
2000

Total

48640

Average cost/cd/dvd

40%

Margin

60%

Break Even

81,067

If sales are $120000 per year how much will they earned?
120000 X 60% =72,000 - fixed costs of 48640 = 23,360
Online DVD/CD Shop
Annual Fixed Costs
Rent
website
utilities
insurance
total

0
200
0
0
200

Average cost/cd/dvd

40%

Margin

60%

Break Even

333.33

If sales are $120000 per year how much will they earned?
120000 x 60% = 72000 - fixed costs of $200.00 = 71,800

Break Even Analysis

Working out of the home VS. having a store front means that you earn $48440.00 more dollars
71800 - 23360 = 48440

Restaurant
Fixed costs monthly
Rent
Payroll
Utilities
Insurance
Equipment Loans

2000
4000
700
300
300

Total
Daily Fixed costs
Margin

$243.33
0.75

Break even per day

$324.44

If they decide they need to be more competitive and change the margin to .65, what will the break ev
Fixed costs monthly
Rent
Payroll
Utilities
Insurance
Equipment Loans
Total
Daily Fixed costs
Margin

2000
4000
700
300
300
$7,300.00
$

Break even per day

243.33
0.65
$374.35

If they purchase new equipment that will allow them to provide better service
and must pay an extra $100/month for it what will the new B.E. be?
Fixed costs monthly
Rent
Payroll
Utilities
Insurance
Equipment Loans
Total

2000
4000
700
300
400
7400

Daily Fixed costs

margin

246.67
0.65

Break even per day

379.49

Comment on the net result these two moves have had on the business.

Plumber
Fixed costs Yearly

Truck
Equipment Loans
Desired annual sala
Gas
Total

10000
2400
50000
2500
$64,900.00

Weekly Fixed costs

Margin

$1,248.08
0.5

Break Even Per Week

$2,496.16

If the plumber lands a job for a $10000 bathroom, how many weeks can he go without landing anothe
If the plumber is able to land the following jobs:
Bathrooms

Kitchens

Total

8
4
3
5
6
2

10000
7500
5000
10000
8000
20000

$800,000
$300,000
$15,000
$50,000
$48,000
$40,000
$263,000

How much profit will he make over the year?

263000 X 50% margin of profit = 131,500 - yearly costs @ 64,900 = a profit of 66.600.

alysis Assignment

ed to sell to Break Even?

example

Sandwich
Sandwich
cost
selling Price
0.95
$3.25

$2.30
Fixed Cost
Rent/Day
$
10.00
$
10.00

Fixed costs/Margin=break even units

Fixed costs/Markup=break even in dollars

ch will they earn in 1 year?

Margin

3250

Markup
0.707692

B/E
4.3
$ 14.13

00 more dollars

what will the break even be?

374.35

without landing another job?