W05 Application Activity: Break-Even Analysis

Part 1: Type Your Refreshing Drink's Name Here:

Limonadas Malaju
For instructions, see your
Canvas course Modules -
W05 Application Activity:
Break-Even Analysis.

C = Correct
✓ Feedback Key:
A = Check Answer, Cell Referencing is Correct
CR = Check Cell Referencing, Answer is Correct
N = Not Correct
 Part 2: Annual Fixed Cost Part 3: Price and % of Demand

Neighborhood Market
Fixed Cost per Month

$319.11 Price
Shop Rental

Utilities (power, water, trash) $112.75 % of Demand

Annual Fixed Cost $5,182.32 C Part 4: Break-Even Point

Variable Costs $0.30

Break-Even Point
(# of cups sold)

Break-Even Point = Fixed Cost / (Price - Variable Cost

Revenue:
Cost:

*After inputing your break-even point

formula, do the Revenue and Cost
match? If so, you have properly
calculated the break-even point.

The break-even point is the number of

cups sold when the cost and revenue
match. When referring to the chart in
Part 5, the break-even point is shown
at the intersection of both lines. Any
additional cups sold after the break-
even point will become profit.
 Part 3: Price and % of Demand

Read
Chart
Price Monthly Price Adjusted
Range Demand Demand 14000
✓ ✓

$0.80
January 270 162 12000
C C
60%
February 604 362
10000
March 1,048 629

Part 4: Break-Even Point

April 1,976 1,186

Amount (in Dollars)

8000
✓ May 3,175 1,905

10365 C
June 4,099 2,459 6000

n Point = Fixed Cost / (Price - Variable Costs)

July 3,040 1,824
4000
August 3,175 1,905
$8292 September 3,745 2,247
$8292 October 2,675 1,605 2000
November 2,083 1,250
December 733 440
0
nputing your break-even point Beginning of End of Year 0
la, do the Revenue and Cost Year
h? If so, you have properly Total Units (Cups) Sold 0 15,974
ated the break-even point.
Annual (Fixed and Variable) Costs $ 5,182 $ 9,974
k-even point is the number of Annual Revenue $0 $ 12,779
d when the cost and revenue Annual Net Profit $ 2,805
When referring to the chart in
he break-even point is shown Profit Margin 22%
ntersection of both lines. Any
nal cups sold after the break-
n point will become profit.
 Part 5: Yearly Cost & Revenue

14000

12000

10000
Amount (in Dollars)

8000

6000

4000

2000

0
0 2000 4000 6000 8000 10000 12000 14000 16000 18000

Number of Cups Sold

Annual Costs (Fixed & Varable) Annual Revenue

14000 16000 18000