# breakeven

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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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