Break-Even Analysis

Enter your numbers in the TFC, VCU, and SPU cells.

Remember that VCU and SPU are per unit.

25000

20000

15000 TFC
TVC
TC
10000
Sale
s
Profit
5000

0
0 400 800 1200 1600 2000 2400 2800 3200 3600 4000

-5000

Break-Even Point (units) = 2,000 Break-Even Point ($'s) = $10,000

Total Fixed Costs TFC = $3,000 Formulas:

Variable Cost per Unit VCU = $3.50 BEP (units) = TFC/(SPU-VCU)
Sales Price per Unit SPU = $5.00 BEP ($'s) = BEP (units) * SPU

Copyright, 2010, JaxWorks, All Rights Reserved.

 Break-Even Analysis

Time Unit price Unit V.C Fixed Cost

Month 45 35 2000

Sal
25000
Units Sales V.Cost Contribution F.Cost Total Cost Net Income
0 0 0 0 2000 2000 (2000.00) 20000
50 2250 1750 500 2000 3750 (1500.00)
100 4500 3500 1000 2000 5500 (1000.00)
150 6750 5250 1500 2000 7250 (500.00) 15000
200 9000 7000 2000 2000 9000 0.00
250 11250 8750 2500 2000 10750 500.00
10000
300 13500 10500 3000 2000 12500 1000.00
350 15750 12250 3500 2000 14250 1500.00
400 18000 14000 4000 2000 16000 2000.00 5000
450 20250 15750 4500 2000 17750 2500.00
500 22500 17500 5000 2000 19500 3000.00
0
0
BEP X BEP Y Label
Break
even
200 9000 units=200

0= units* (Sales- Variable Cost) - Fixed Cost

Fixed cost = Units*(Sales-Variable Cost)

Units= Fixed cost/(Sales-Variable Cost)

BEP= F.C /(1-(V.C/SALES)

 Sales F.Cost Total Cost Break even units=200
25000

20000

15000

10000
9000

5000

0
0 100 200 300 400 500 600
Wavendon Plumbing: 6-Month Financial Projection

Number of Months 6

CALCULATE YOUR GROSS PROFIT

Projected Sales 75,000

Less Direct Costs

Purchases (material costs) 32,500
Labour Costs 20,000
Gross Profit 22,500

Gross Profit Margin 30%

CALCULATE YOUR OVERHEADS

Indirect Costs
Business Salaries (including your own drawings) 6,000
Rent 2,000
Rates 500
Light/Heating 500
Telephone/Postage 500
Insurance 500
Repairs 2,000
Advertising 1,500
Bank Interest/Hire Purchase 1,500
Other (eg depreciation of fixed assets) 1,500
Overheads 16,500

Break-Even Sales 55,000

Monthly Break-Even Sales 9,167

Profit (for 6 months) 6,000

 Break-Even Analysis

2007 2008 2009 2010

Sales 2,010,000.00 2,060,000.00 2,121,800.00 2,391,800.00

Less Variable Expenses

Materials 320,000.00 329,600.00 339,488.00 389,088.00
Labor 500,000.00 515,000.00 530,450.00 545,450.00
Variable overhead 125,000.00 128,750.00 132,612.50 186,362.50
Other 0.00 0.00 0.00 0.00
Contribution Margin 1,065,000 1,086,650 1,119,250 1,270,900
Contribution Margin Ratio 52.99% 52.75% 52.75% 53.14%

Fixed Expenses
Salaries and wages 190,000 190,000 190,000 190,000
Employee benefits 50,000 51,500 53,045 54,545
Payroll taxes 30,000 30,900 31,827 32,727
Rent 5,000 5,150 5,305 5,455
Utilities 3,000 3,090 3,183 3,273
Repairs and maintenance 1,000 1,030 1,061 1,061
Insurance 1,000 1,030 1,061 1,061
Travel 2,133 2,197 2,263 2,263
Telephone 11,000 11,330 11,670 12,670
Postage 4,000 4,120 4,244 4,244
Office supplies 6,000 6,180 6,365 6,365
Advertising 1,000 1,030 1,061 1,061
Marketing/promotion 3,000 3,090 3,183 3,183
Professional fees 1,000 1,030 1,061 1,061
Training and development 1,000 1,030 1,061 1,061
Bank charges 1,000 1,030 1,061 1,061
Depreciation 1,000 1,030 1,061 1,061
Interest Expense 6,000 6,000 6,000 6,000
Other 0 0 0 0
Total Fixed Expenses 317,133 320,767 324,510 328,150
Total Fixed Expenses Ratio 15.78% 15.57% 15.29% 13.72%
Break-Even Sales 598,533 608,089 615,185 617,570
Break-Even % 29.78% 29.52% 28.99% 25.82%
Operating Profit 747,867 765,883 794,740 942,750

Sales 2,010,000.00 2,060,000.00 2,121,800.00 2,391,800.00

Less: Variable Cost 945,000.00 973,350.00 1,002,550.50 1,120,900.50

Contribution 1,065,000.00 1,086,650.00 1,119,249.50 1,270,899.50

Less: Fixed cost 317,133.00 320,766.99 324,510.00 328,150.00

Net Operating Profit 747,867.00 765,883.01 794,739.50 942,749.50

Break even sales 598532.7042254 608089.08056872 615184.8335545 617569.81514

Time Unit price Unit V.C Fixed Cost

Month 45 35 2000

Month Sales V.Cost Contribution F.Cost

1 300,000.00 141,044.78 158,955.22 317,133.00
2 598,532.70 281,399.70 317,133.00 317,133.00
3 900,000.00 423,134.33 476,865.67 317,133.00
4 1,200,000.00 564,179.10 635,820.90 317,133.00
5 1,500,000.00 705,223.88 794,776.12 317,133.00
6 1,800,000.00 846,268.66 953,731.34 317,133.00
7 2,010,000.00 945,000.00 1,065,000.00 317,133.00
8 2,400,000.00 1,128,358.21 1,271,641.79 317,133.00
9 2,700,000.00 1,269,402.99 1,430,597.01 317,133.00

Break Even 598,532.70 BEP=598532.7

Break Even Chart

Sales Fixed Cost Total Cost BEP=598532.7

3,000,000.00

2,500,000.00

2,000,000.00

1,500,000.00

1,000,000.00

598,532.70
500,000.00

0.00
0 1 2 3 4 5 6 7 8
 Total Cost Net Income
458,177.78 -158,177.78
598,532.70 -0.00
740,267.33 159,732.67
881,312.10 318,687.90
1,022,356.88 477,643.12
1,163,401.66 636,598.34
1,262,133.00 747,867.00
1,445,491.21 954,508.79
1,586,535.99 1,113,464.01

BEP=598532.7

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