STUDENT NAME: Dominic Clark

HEADLINERS HAIR SALON BREAK EVEN CHART

Units of
production

Variable
costs

Fixed costs

Total costs Sales income

Total
Profit/loss [4]
[1]
[2]
Contribution [3]

2083

2083

-2083

100

625

2083

2708

1665

1040

-1043

200

1250

2083

3333

3330

2080

-3

300

1875

2083

3958

4995

3120

1037

400

2500

2083

4583

6660

4160

2077

500

3125

2083

5208

8325

5200

3117

600

3750

2083

5833

9990

6240

4157

700

4375

2083

6458

11655

7280

5197

800

5000

2083

7083

13320

8320

6237

900

5625

2083

7708

14985

9360

7277

1000

6250

2083

8333

16650

10400

8317

Fixed Costs () 2083

Variable Cost Per Unit ()

6.25

Selling Price Per Unit () 16.65

Contribution/Unit

10.4

Contribution/Sales
Ratio (%)

62.46

Break Even Point

(Units)

200

Questions: Also, if Headliners sell 412

612 cuts, what is the 'margin of
safety'?
What effect is there if headliners Breakeven point
changed their direct material
becomes 211
costs from 2.5 to 3?
units (from 200).

What effect is there if headliners Breakeven point

changed their selling price from becomes 235
15 to 14?
units (from 211).
The contribution
per unit
decreases to
8.5 from 9.5.
What effect is there if headliners Breakeven point
changed their fixed costs to
becomes 245
25000 per annum from 24000? units (from 235).

What effect is there if headliners Breakeven point

decrease their variable overhead becomes 269
to 1.75
units (from 245).
The contibition
goes to 7.75
from 8.5.
To get the breakeven point back
to 200 units, Headliners must
increase their price per unit to...

16.65

[1] Mr Cornes:
Remember:
FC + VC =TC
[2] Mr Cornes:
TR = P*Q
[3] Mr Cornes:
The total amount of contribution towards overheads generated at a given sales level
[4] Mr Cornes:
REMEMBER:
PROFIT/LOSS = TR=TC