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					                                                           Break Even Analysis Assignment
                                                      How Much do we need to sell to Break Even?

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/Margin=break even
                                                                                              Fixed costs/Markup=break even
Fixed costs   Costs that do not change regardless of whether we sell anything




Bookkeeping company
Fixed costs per month
              Loan to pay computer                   $    100.00
              Website costs                          $     10.00
              Total                                       $110.00

Monthly Charge for services                          $      75.00

Costs per month to provide service
             gas to get there and back               $      10.00

              margin                                        65.00




Break Even                                           1.692307692


If the service has 50 clients that it does bookkeepping for each month, how much will they earn in 1 year?

In Store DVD/CD Shop
Annual Fixed Costs
              Rent                           24000
              payroll                        16640
              utilities                       6000
              insurance                       2000
              Total                          48640

Average cost/cd/dvd                           0.40

Margin                                        0.60
Break Even                             81,066.67


If sales are $120000 per year how much will they earned?            $ 42,816.00


Online DVD/CD Shop
Annual Fixed Costs
              Rent                              0
              website             $       200.00
              utilities                         0
              insurance                         0
              total               $       200.00

Average cost/cd/dvd                          0.40

Margin                                       0.60

Break Even                                333.33


If sales are $120000 per year how much will they earned?            $ 71,880.00



Break Even Analysis




Restaurant
Fixed costs monthly
              Rent                           2000
              Payroll                        4000
              Utilities                       700
              Insurance                       300
              Equipment Loans                 300
Total                                        7300

Daily Fixed costs                             0.25
Margin                                        0.75

Break even per day                $      9,733.33    $     324.44

If they decide they need to be more competitive and change the margin to .65, what will the break even be?

Fixed costs monthly
              Rent                           2000
              Payroll                        4000
               Utilities                          700
               Insurance                          300
               Equipment Loans                    300
Total                                            7300

Daily Fixed costs                                0.35
Margin                                           0.65

Break even per day                   $    11,230.77        $    374.36


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                               2000
              Payroll                            4000
              Utilities                           700
              Insurance                           300
              Equipment Loans                     400
Total                                            7400

Daily Fixed costs                                0.35
margin                                           0.65

Break even per day                        11,384.62        $    379.49

Comment on the net result these two moves have had on the business.             They made their breakeven point higher by




Plumber
Fixed costs Yearly
              Truck              $        10,000.00
              Equipment Loans $            2,400.00
                                 $
              Desired annual salary       50,000.00
              Gas                $         2,500.00
Total                            $        64,900.00

Weekly Fixed costs                                   0.5
Margin                                               0.5

Break Even Per Week                  $   129,800.00


If the plumber lands a job for a $10000 bathroom, how many weeks can he go without landing another job?

If the plumber is able to land the following jobs:

Bathrooms                         8 $     10,000.00        $ 80,000.00
                                  4 $      7,500.00        $ 30,000.00
                                  3 $      5,000.00        $ 15,000.00
Kitchens                        5 $     10,000.00      $ 50,000.00
                                6 $      8,000.00      $ 48,000.00
                                2 $     20,000.00      $ 40,000.00
Total                                                  $ 263,000.00

How much profit will he make over the year?            $ 263,000.00

               sales                                   $ 263,000.00
               fixed costs                             $ 64,900.00
               Gross Profit                            $ 198,100.00
               variable costs                          $ 99,050.00
                                    Profit             $ 99,050.00
If the plumber had to lower his prices in order to obtain those jobs, and reduced his margin to 40%,
how much would he make?
               sales                                   $ 263,000.00
               fixed costs                             $ 64,900.00
               Gross Profit                            $ 198,100.00
               variable costs                          $ 118,860.00
                                    Profit             $ 79,240.00

WWW's Web Design
Fixed Costs Per Year
             Rent                                  0
             Payroll                               0
             Car Insurance          $         2,000
                                    $         2,000


average Charge per website       $             250
             costs per website
             Hosting             $               60
             domain name                          6
             Total Variable Cost               0.26
             Margin                            0.74

               Markup                          0.74

So if WWW is able to land 5 websites per week during the 13 weeks of his summer holidays, how much money will he make?

sales          $        16,250.00
Gross Profit   $        12,025.00

Fixed Costs    $           2,000

Profit         $        10,025.00
Assignment
ell to Break Even?

                          Sandwich     Sandwich         Margin     Markup     Boolkeeping Company
                            cost      selling Price                           In Store DVD/CD Shop
                example          0.95         $3.25        $2.30 0.707692     Restraunt
                                                                              Plumber
                                                      Fixed Cost              WWW's Web Design
                                                       Rent/Day      B/E
 Fixed costs/Margin=break even units                  $    10.00        4.3
 Fixed costs/Markup=break even in dollars             $    10.00   $ 14.13




rn in 1 year?                         $ 39,000.00
reak even be?   $ 11,230.77   $   374.36
e their breakeven point higher by changing their margin and buying more equipment. This can be a good or bad thing depending on how goo




g another job?
how much money will he make?
bad thing depending on how good sales are.
                                                                    Break Even for a Pizzeria


                                    Selling Price   $ 10.00
                                    Our cost        $ 3.00
                                    Margin          $ 7.00
                                    Markup               0.7


Break even in Dollars Fixed costs                              =Fixed costs/markup               Break even in units
                           2000                                 $          2,857.14
                           3000                                 $          4,285.71
                           5000                                 $          7,142.86
                             600                                $            857.14
                           1800                                 $          2,571.43
                          10000                                 $        14,285.71
                          15000                                 $        21,428.57
                          11000                                 $        15,714.29

                                                               If our costs go up to $3.50 and we raise our price to $11
                           2000                                  $           2,933.33
                           3000                                  $           4,400.00
                           5000                                  $           7,333.33
                            600                                  $             880.00
                           1800                                  $           2,640.00
                          10000                                  $         14,666.67
                          15000                                  $         22,000.00
                          11000                                  $         16,133.33
 a Pizzeria


              Selling Price   $ 11.00
              Our cost        $ 3.50
              Margin          $ 7.50
              Markup              0.68


  Break even in units         Fixed Costs   =Fixed costs/Margin
                                   2000                   285.71
                                   3000                   428.57
                                   5000                   714.29
                                     600                   85.71
                                   1800                   257.14
                                  10000                 1,428.57
                                  15000                 2,142.86
                                  11000                 1,571.43

we raise our price to $11
                                  2000                   266.67
                                  3000                   400.00
                                  5000                   666.67
                                   600                    80.00
                                  1800                   240.00
                                 10000                 1,333.33
                                 15000                 2,000.00
                                 11000                 1,466.67

				
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