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Break Even Chapter 8
Break Even Chapter 8
Markup
Variable cost
1-markup(as a percentage)
What we pay for each unit we sell(dollar amount)
Fixed costs
1000
66
1066
75
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
$48,640.00
Average cost/cd/dvd
40%
Margin
60%
Break Even
81066.67
If sales are $120000 per year how much will they earned?
0
200
0
0
$200.00
Average cost/cd/dvd
40%
Margin
60%
Break Even
333.3333333333
If sales are $120000 per year how much will they earned?
Restaurant
Fixed costs monthly
Rent
Payroll
Utilities
Insurance
Equipment Loans
120000*0.6-48,0640
2000
4000
700
300
300
120000*0.6-200
Total
Daily Fixed costs
Margin
Break even per day
7300
$
243.33
0.75
243.33/0.75
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
2000
4000
700
300
300
$7,300.00
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
$7,400.00
246.67
0.65
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
10000
2400
50000
2500
64900
Total
Weekly Fixed costs
Margin
$1,248.08
0.5
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
Total
80000
30000
15000
50000
48000
40000
$263,000.00
$263,000.00
Kitchens
8
4
3
5
6
2
10000
7500
5000
10000
8000
20000
alysis Assignment
example
Sandwich
Sandwich
cost
selling Price
0.95
$3.25
Margin
$2.30
Fixed Cost
Rent/Day
$
10.00
$
10.00
Markup
0.707692
B/E
4.3
$ 14.13
$23,360.00
$71,800.00
243.33/0.65
$ 374.35
These moves had a negative outcome, by providing a better service, they are paying more.
4.006 3 weeks
paying more.