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Break Even Analysis with Excel Model

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					                                                       BREAK EVEN POINT ANALYSIS
                                                  BREAK EVEN UNITS FOR THE YEAR
Break even point Analysis                                   Total Units          1200
For the year                                                Total Revenues      24000

Jan-09                                                           Contribution margin 21600
                                                                 Total Fixed Cost    10800
Selling price per unit                  20                                             600
                                                                 BREAK EVEN UNITS FOR THE YEAR

                                     Jan-09   Feb-09    Mar-09     Apr-09   May-09   Jun-09   Jul-09    Aug-09   Sep-09   Oct-09   Nov-09   Dec-09
Number Of Units Sold                    100      100      100        100       100      100     100        100      100     100       100      100
TOTAL REVENUES                         2000     2000     2000       2000     2000      2000    2000       2000     2000    2000     2000      2000


Variable Cost
Materials                              200      200       200        200      200      200        200     200      200      200      200      200
Direct Labor
Indirect Labor
Utilities
Insurance
Taxes
Telephone
Accounting and legal
Advertising
Repairs and maintainer
Misc. expenses


TOTAL VARIABLE COST                    200      200       200        200      200      200        200     200      200      200      200      200

CONTRIBUTION MARGIN                   1800     1800      1800       1800     1800     1800       1800    1800     1800     1800     1800     1800

Fixed Cost
Rent                                   900      900       900        900      900      900        900     900      900      900      900      900
Office and Administrative salaries
Other Fixed Cost


TOTAL FIXED COST                       900      900       900        900      900      900        900     900      900      900      900      900

BREAK EVEN UNITS                        50       50        50         50       50       50         50      50       50       50       50       50
cost which the business has to meet whether it produces or not, examples of
such costs include leaseholds and management salary. Variable costs are cost tied to production and
they are incurred as a result of goods or services production. Labor cost and material cost are examples
of variable costs.

Excel is an excellent tool for analysis break even point. By keying in input, a business is supplied with
decision tool to analysis different scenarios and determines the price and production units to be
produced and sold to break even. Because a business can not easily control fixed cost, managers and
business owners are always advised to manage variable cost in order to stay competitive in pricing. The
excel template allows altering different variable to show break even units under different scenarios.
                                                       BREAK EVEN POINT ANALYSIS
                                                  BREAK EVEN UNITS FOR THE YEAR
Break even point Analysis                                   Total Units          1200
For the year                                                Total Revenues      24000

Jan-09                                                           Contribution margin 21600
                                                                 Total Fixed Cost    10800
Selling price per unit                  20                                             600
                                                                 BREAK EVEN UNITS FOR THE YEAR

                                     Jan-09   Feb-09    Mar-09     Apr-09   May-09   Jun-09
Number Of Units Sold                    100      100      100        100       100      100
TOTAL REVENUES                         2000     2000     2000       2000     2000      2000


Variable Cost
Materials                              200      200       200         200     200      200
Direct Labor
Indirect Labor
Utilities
Insurance
Taxes
Telephone
Accounting and legal
Advertising
Repairs and maintainer
Mis expense


TOTAL VARIABLE COST                    200      200       200         200     200      200

CONTRIBUTION MARGIN                   1800     1800      1800        1800    1800     1800

Fixed Cost
Rent                                   900      900       900         900     900      900
Office and Administrative salaries
Other Fixed Cost


TOTAL FIXED COST                       900      900       900         900     900      900

BREAK EVEN UNITS                        50       50        50         50       50       50
ANALYSIS




           Jul-09   Aug-09   Sep-09   Oct-09   Nov-09   Dec-09
             100       100      100     100       100      100
            2000      2000     2000    2000      2000     2000



             200      200      200      200      200      200




             200      200      200      200      200      200

            1800     1800     1800     1800     1800     1800


             900      900      900      900      900      900




             900      900      900      900      900      900

              50       50       50       50       50       50

				
DOCUMENT INFO
Description: A company can use this template spreadsheet to perform a break-even analysis. A break-even analysis is one form of cost analysis; it is used to calculate the margin of revenues needed to exceed a company's break-even point - the point at which revenues equal the costs associated with producing that revenue. This supply side metric can be used by managers to help understand the relationships between sales, costs, and profits. A break-even analysis can be helpful to companies trying to analyze revenue margins for certain products or services, adjust pricing schemes, or set sales targets.
This document is also part of a package Financial Models Bundle 7 Documents Included