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    Break Even Analysis Weeeeeeeeeeh

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    Nembrod Enano
    This document discusses how to calculate the break-even point for a business using a formula that involves total revenue, variable costs, fixed costs, and output. It provides an example of calculating the break-even point for a restaurant called High 5 that sells meals for $200 each, with a variable cost of $80 per meal and fixed costs of $120,000. Using the formula, it determines that the break-even point for High 5 is 1,000 meals - meaning the business will be profitable once it sells more than 1,000 meals.

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    Break Even Analysis Weeeeeeeeeeh

    Uploaded by

    Nembrod Enano
    17 views11 pages
    This document discusses how to calculate the break-even point for a business using a formula that involves total revenue, variable costs, fixed costs, and output. It provides an example of calculating the break-even point for a restaurant called High 5 that sells meals for $200 each, with a variable cost of $80 per meal and fixed costs of $120,000. Using the formula, it determines that the break-even point for High 5 is 1,000 meals - meaning the business will be profitable once it sells more than 1,000 meals.

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    This document discusses how to calculate the break-even point for a business using a formula that involves total revenue, variable costs, fixed costs, and output. It provides an example of calculating the break-even point for a restaurant called High 5 that sells meals for $200 each, with a variable cost of $80 per meal and fixed costs of $120,000. Using the formula, it determines that the break-even point for High 5 is 1,000 meals - meaning the business will be profitable once it sells more than 1,000 meals.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    17 views11 pages

    Break Even Analysis Weeeeeeeeeeh

    Uploaded by

    Nembrod Enano
    This document discusses how to calculate the break-even point for a business using a formula that involves total revenue, variable costs, fixed costs, and output. It provides an example of calculating the break-even point for a restaurant called High 5 that sells meals for $200 each, with a variable cost of $80 per meal and fixed costs of $120,000. Using the formula, it determines that the break-even point for High 5 is 1,000 meals - meaning the business will be profitable once it sells more than 1,000 meals.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    of 11

    How soon will your business be profitable?

    Total Revenue = Total Cost Fixed Cost + Variable cost Break even =
    Fixed cost

    Price variable cost

    Price Variable cost = contribution =


    Fixed cost Contribution

    7 PROFIT,COST,REVENUE 6 5 4 3 2 1 FIXED COST

    TOTAL COST
    TOTAL REVENUE

    0
    OUT PUT

    7 PROFIT,COST,REVENUE 6 5 4 3 2 1 FIXED COST TOTAL COST

    TOTAL REVENUE
    NEW FIXED COST NEW TOTAL COST OUT PUT

    7 PROFIT,COST,REVENUE 6 5 4 3 2 1 FIXED COST TOTAL COST TOTAL REVENUE NEW TOTAL COST

    0
    OUT PUT

    High 5 restaurant, sells meals for $200 each. The meals cost $80 each to prepare. The restaurant also pays fixed cost such as rent etc. of $120,000.
    Fixed cost
    Price variable cost

    Fixed cost = 120,000 Price= 200 Fixed Cost = 80

    Break even= 120,000 200 - 80

    = 1000

    400,000 Profit, Cost, Revenue 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0

    200

    400

    600

    800

    1000 1200 1400 1600 1800 2000

    No. of Meals

    Formula: (Contribution per unit x output) Fixed cost

    Output be = 1000, 800, 1200 respectively

    [(200 - 80) 1000] 120,000 = 0 Break Even

    [(200 - 80) 800] 120,000 = -2,4000 Loss


    [(200 - 80) 1000] 120,000 = 12,000 Profit

    Result is as accurate as the data

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