Sal and Mario's Pepperoni Delight Restaurant sells only pepperoni pizza. To understand their business finances, the document introduces key concepts like revenue, expenses, profit, fixed costs, and variable costs. It then explains the important concept of break-even point, where total revenue equals total expenses and profit is zero. The document provides an example of calculating break-even point for Sal and Mario's pizza business. It determines their break-even sales units as 1,273 pizzas and break-even sales dollars as $12,730. Understanding these financial fundamentals is important for successfully starting and running any business.
the document is on Cost volume profit analysis.
(Cost-volume-profit (CVP) analysis is used to determine how changes in costs and volume affect a company's operating income and net income.)
the document is on Cost volume profit analysis.
(Cost-volume-profit (CVP) analysis is used to determine how changes in costs and volume affect a company's operating income and net income.)
INFORMATION ABOUT
B.E.P.
Definition
Cost Volume Profit analysis & Application
Assumption of BEP analysis
Calculation
Method
Formula
Target profit
Margin of safety
Definition
Formula
Limitation of B.E.P.
Basic equation of Marginal Costing
Uses Of CVP Analysis
Limitations Of CVP Analysis
Profit Volume (P/V) Ratio
Marginal costing
Determination Of Marginal Cost
Features of Marginal Costing
Break-even analysis is a study of costs, revenues and sales of a firm and find out the volume of sales where the firm’s costs and revenues will be equal. The Break-even point is the zone of no-profit and no-loss as the costs equal revenues.
In this presentation, we will discuss in details about cost of production and various concepts of cost like fixed cost, variable cost, average cost, marginal costs, etc.
To know more about Welingkar School’s Distance Learning Program and courses offered, visit:
http://www.welingkaronline.org/distance-learning/online-mba.html
Consumer Behavior: Income and Substitution Effects
The Consumer’s Reaction to a Change in Income
Engel Curve or Engel’s Law
The Consumer’s Reaction to a Change in Price
The Consumer’s Demand Function
Cobb-Douglas Utility Function
The Slutsky Substitution Effect
The Hicks substitution effect
INFORMATION ABOUT
B.E.P.
Definition
Cost Volume Profit analysis & Application
Assumption of BEP analysis
Calculation
Method
Formula
Target profit
Margin of safety
Definition
Formula
Limitation of B.E.P.
Basic equation of Marginal Costing
Uses Of CVP Analysis
Limitations Of CVP Analysis
Profit Volume (P/V) Ratio
Marginal costing
Determination Of Marginal Cost
Features of Marginal Costing
Break-even analysis is a study of costs, revenues and sales of a firm and find out the volume of sales where the firm’s costs and revenues will be equal. The Break-even point is the zone of no-profit and no-loss as the costs equal revenues.
In this presentation, we will discuss in details about cost of production and various concepts of cost like fixed cost, variable cost, average cost, marginal costs, etc.
To know more about Welingkar School’s Distance Learning Program and courses offered, visit:
http://www.welingkaronline.org/distance-learning/online-mba.html
Consumer Behavior: Income and Substitution Effects
The Consumer’s Reaction to a Change in Income
Engel Curve or Engel’s Law
The Consumer’s Reaction to a Change in Price
The Consumer’s Demand Function
Cobb-Douglas Utility Function
The Slutsky Substitution Effect
The Hicks substitution effect
CVP Analysis 17th Edition By Azad and Mansoor.pptxazadalisthp2020i
The 17th edition of CVP Analysis provides a concise overview of how costs, volume, and prices influence profitability, offering practical insights and real-world applications for students and professionals in managerial accounting. With updated content and examples, it serves as an essential resource for mastering cost-volume-profit analysis.
I am Bharti Rawal. My age is 40. My stream is commerce. I do blogging and my blog name is Learn-Fun-Knowledge. My concept of blogging was, I have learnt the lesson from Google that we should help each other. Learn-Fun-Knowledge wants to tell people that Google was not a cheater and so we are not too. So here we share the content which is relevant and useful for users. Learn-fun-Knowledge thinks about the users, not about the marketing. We provide good content so keep reading up.
how can I sell my pi coins for cash in a pi APPDOT TECH
You can't sell your pi coins in the pi network app. because it is not listed yet on any exchange.
The only way you can sell is by trading your pi coins with an investor (a person looking forward to hold massive amounts of pi coins before mainnet launch) .
You don't need to meet the investor directly all the trades are done with a pi vendor/merchant (a person that buys the pi coins from miners and resell it to investors)
I Will leave The telegram contact of my personal pi vendor, if you are finding a legitimate one.
@Pi_vendor_247
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#pi coins
#money
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
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Application Process:
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USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
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3. 1
Break-Even Point
Lesson Plan
OBJECTIVE
Introduce students to fundamental concepts of successfully starting and
running a business, focusing on break-even point analysis.
Students will be able to:
00 Understand the vocabulary associated with revenue and expenses
00 Understand the relationship among revenue, expenses and profit
00 Analyze break-even data in a variety of situations
00 Calculate price, sales units, and revenue values for different
situations.
TEACHING MATERIALS
00 Lesson plan
00 Break-Even Point student handout
00 Student assessment worksheet with solutions
LESSON ACTIVITY
1. Determine students’ prior knowledge of fundamental vocabulary
and concepts by asking questions such as:
• What is profit, and where does it come from?
• It’s revenue above and beyond expenses.
• What is revenue, and how does it differ from income?
• Revenue is earned income from a business source or
occupation. Income can be passive, such as interest and
dividends.
• What is your understanding of a break-even point?
2. Present the student handout.
• Fundamental equation: Profit = Revenue – Expenses.
• The break-even point is the point where Revenue = Expenses
and Profit = 0.
• Expenses may be fixed or variable.
−− Fixed expenses do not vary based on units sold.
• They include rent, utilities, insurance and licenses.
• Labor can be a fixed expense if workers are paid salary
or hourly, not by the job.
−− Variable expenses are related to production of each unit.
• They include raw materials, packaging and per-unit
expenses.
• Labor can be a variable expense if workers are paid per
product produced or per service rendered.
Introduction
4. 2
Break-Even Point
Introduction
• Check students’comprehension so far by working through the
example on page 7 of the handout, calculating the break-even point
and the profit made from selling 11 instead of 7 units.
Had I sold 11 units instead of 7 units this week, my revenue would
have exceeded my expenses and I would have made a profit. How
much profit would I have made?
P = Price = 15
X = Units sold = 11
FC = Fixed costs = 94.50
V = Variable costs = 1.50
• The contribution margin is the amount of revenue available to pay
the fixed costs after reducing revenue by the variable costs needed
to produce the units.
• Formula: Contribution margin = Revenue – Variable costs
• Check students’comprehension by working through the example on
page 8 of the handout.
My product costs $15, and 25 are sold this week. My variable costs
to produce my product are $1.50 per unit. Can you calculate the
contribution margin? Is there a profit?
Revenue = 15 x 25 = 375
Variable costs = 25 x 1.50 = 37.50
CM = Revenue – Variable costs
CM = 375 – 37.50 = $337.50
The example does not say what the fixed costs are, so it can’t be
determined if the contribution margin is enough to cover the fixed
costs and contribute to a profit.
• Break-even sales units are the number of units that must be sold
to reach the break-even point. Using the break-even point equation,
Px = Vx + FC, you can solve for X to determine the number of units
that need to be sold to break even.
Px = Vx + FC
(Px – Vx) = FC
x(P – V) = FC
FC
X =
(P – V)
Px = FC + Vx + Profit
(15)(11) = (94.50) + (1.50)(11) + Profit
165 = 94.50 + 16.50 + Profit
165 = 111 + Profit
Profit = 165 – 111
Profit = $54.00
5. 3
Break-Even Point
Introduction
Work through the example in the student handout of calculating
break-even sales units.
Check students’comprehension with the following exercise:
If I sell a product for $79.99 that costs me $11.99 per unit to produce
and my fixed costs total $27,336, how many units must I sell to break
even?
P = 79.99
V = 11.99
FC = 27336
FC 27336 27336
X = = = = 402
(P – V) (79.99 – 11.99) 68
X = 402 units
Break-even sales dollars are the amount of revenue needed to reach
the break-even point. Once the break-even sales units figure is
calculated, then the break-even sales dollars can be determined.
• Formula: Break-even sales dollars = Price per unit x Break-even
sales units
FC
Break-even sales dollars = Px = Px
(P – V)
Work through the example in the student handout of calculating
break-even sales dollars.
3. Lead a class discussion on revenue, expenses and profit. Suggested
discussion points and expected responses follow, but student
perspectives may lead to interesting conversation.
Think about the formula Revenue = Expenses + Profit. Name three
ways to increase profit from a business. Expected responses:
• Increasing revenue by:
−− Raising prices. Expenses will remain constant, resulting in an
increase in profit.
−− Selling more units. The contribution margin will rise higher than
variable expenses, resulting in an increase in profit.
• Reducing expenses.
−− Reducing fixed costs, variable costs or both will result in an
increase in profit, which will keep the right side of the equation
in balance with revenue.
• Both increasing revenue and reducing expenses using a
combination of the strategies above.
6. 4
Break-Even Point
Introduction
Think about the formula Revenue = Price per unit x Number of units
sold. Name three ways to increase revenue. Expected responses:
• Raising prices
• Increasing sales
• Both of the above.
Think about the formula Expenses = Variable costs x Units + Fixed
costs. Name four ways to reduce expenses. Expected responses:
• Reduce fixed costs
• Reduce variable costs per unit
• Reduce sales
• All of the above.
Reducing sales will lower expenses, but is this a conservative
business practice that will benefit the company? Explain.
4. Lead students in a whole-class exercise. The following table can be
displayed on a projection screen or written on a board by students
with teacher direction.
Consider Sal and Mario’s Pepperoni Delight Restaurant, which only
sells pepperoni pizza. The expenses for Sal and Mario’s are shown
below.
Fixed Costs Variable Costs Per Pizza
General Labor $1,500 Flour $0.50
Rent $3,000 Yeast $0.05
Insurance $200 Water $0.01
Advertising $500 Cheese $3.00
Utilities $450 Pepperoni $2.00
Total $5,650 Total $5.56
7. 5
Break-Even Point
Introduction
A. What is the minimum price Sal and Mario can charge for each
pizza?
$5.56 covers the variable costs of each pizza, so one pizza could be
sold for this price.
B. If Sal and Mario price their pizzas at $10 each, what is their
contribution margin?
CM = Revenue – Variable cost = 10 – 5.56 = $4.44 per pizza
C. Calculate the break-even sales units and break-even sales dollar
figures.
FC 5650 5650
Break-even sales units = X = = = = 1272.5
(P – V) (10 – 5.56) 4.44
Break-even sales units: 1,273 pizzas
Break-even sales dollars = Price per unit x Break-even sales units
Break-even sales dollars = 10 x 1273 = $12,730
5. Evaluate students’ comprehension (see assessment worksheet).
8. 6
Break-Even Point
Student Handout: Break-Even Point
So you want to make money? Learning the basics before starting any kind of
business is a smart move, because making money requires more than just
having a great idea. It’s equally important to know where the money comes
from and where it all goes.
Throughout this lesson, we will define some important terms, starting with
profit, which is the amount of revenue you get to keep after all expenses are
paid. Revenue is the amount of money a business makes. Expenses are the
costs incurred to make the revenue, and profit is the remaining money after
expenses are paid.
If a business sells a product, revenue is the price a product is sold for multiplied
by the number of products sold. If a business provides a service instead of
selling a product, then the revenue would be the price charged for a service
(commonly referred to as a fee) multiplied by the number of services sold.
If the service is provided to each customer only once in a specific period of
time, then revenue is the fee charged multiplied by the number of customers.
There are two types of expenses: fixed costs and variable costs. Fixed costs do
not change regardless of how many products are sold or services performed.
Examples of fixed costs include rent, insurance premiums and loan payments.
Labor costs can be a fixed cost if workers are paid a salary or paid by the hour,
since their cost is determined by time and not by how many products they
produce.
Fixed costs are usually the same amount each month. Variable costs
change depending on how many products are made or how many services
are performed. Examples of variable costs include raw materials used to
manufacture a product, consumption of fuel during production of the product
and packaging of the finished product. If workers are paid by the number of
pieces they produce, then labor costs would be a variable cost, too. Variable
costs are zero if production is zero. Variable costs will grow as more products
are produced. Fixed costs and variable costs add up to total expenses.
If revenue is the money earned, and expenses are paid from the revenue, then
profit is the remaining revenue left after expenses:
Profit = Revenue – Expenses
We can use algebra to reposition the variables for a new formula:
Revenue = Expenses + Profit
This is actually the same formula, just written in a different way. Notice that
the left side of the equal sign shows how much money is earned, and the right
side shows where it all goes.
Student Handout: Break-Even Point
9. 7
Break-Even Point
Student Handout: Break-Even Point
Break-Even Point (BEP)
In general, the break-even point, or BEP, is where gains equal losses. In
business, the BEP is the point where revenue equals expenses. At this point,
there is no profit. For a business, knowing and reaching the BEP is the first
major step toward creating a profitable company. The break-even point is when
earnings equal the costs to earn them, which means there is no profit and no
loss. You break even.
If Revenue = Expenses + Profit, and profit is 0 at the BEP, then Revenue =
Expenses at the BEP.
Revenue is the price charged for a product (P) multiplied by the number of
products sold (X) so revenue = Px.
Expenses are fixed costs + variable costs. Fixed costs are a constant number
(FC), and variable costs are costs to make each product (V) multiplied by the
number of products sold (X), so expenses = FC + Vx.
Substituting these values for the big-picture variables in our BEP equation:
Revenue = Expenses at the BEP
Px = FC + Vx at the BEP
My product costs $15, and 7 are sold this week. My fixed costs for the
week are $94.50, and my variable costs to produce my product are $1.50
per unit.
P = 15
X = 7
FC = 94.50
V = 1.50
Px = Vx + FC
(15) x (7 units) = (1.50) x (7 units) + 94.50
105 = 10.50 + 94.50
$105 = $105
Revenue = Expenses
I broke even this week by selling 7 units at $15 each. Had I sold 11 units
instead of 7 units this week, my revenue would have exceeded my
expenses and I would have made a profit. How much profit would I have
made?
Example >>>
10. 8
Break-Even Point
Student Handout: Break-Even Point
Contribution Margin
An important term used in BEP analysis is contribution margin. This is the
amount of revenue available to pay the fixed costs for a business.
Contribution margin = Revenue – Variable costs
Subtracting the per-unit costs (variable costs) from the revenue earned leaves
the contribution margin. If the contribution margin is less than the fixed costs,
the BEP has not been reached. When the contribution margin equals fixed
costs, you are at the BEP. If the contribution margin exceeds fixed costs, there
is a profit.
My product costs $15, and 25 are sold this week. My variable costs to
produce my product are $1.50 per unit. Can you calculate the contribution
margin? Is there a profit? Explain your answer.
Example >>>
Break-Even Sales Units
Using BEP analysis, we can ask and answer some very important questions
about a business, such as how many units must be sold to break even.
The answer to this question is called break-even sales units and can be
calculated as follows.
In the BEP equation, Px = Vx + FC, X is the number of units sold that brings
the equation into balance.
Use algebra to solve for X: Px = Vx + FC
(Px – Vx) = FC
x(P – V) = FC
FC
X =
(P – V)
Solving for X shows the number of units that need to be sold to break even.
Calculate the break-even sales units for the following example:
I’m selling a product for $15 per unit. My variable cost per unit is $7. My fixed
costs are $9,000. How many units do I have to sell to break even?
Solution P = 15
V = 7
FC = 9000
FC
X =
(P – V)
9000
X =
(15 – 7)
X = 1,125 units
11. 9
Break-Even Point
Student Handout: Break-Even Point
Break-Even Sales Dollars
Another important question can be answered using BEP analysis: How much
revenue must I make to break even?
The answer to this question is called break-even sales dollars and can be
calculated as follows.
In the BEP equation, Px = Vx + FC, Px is the revenue needed to bring the
equation into balance, P is the price of each product, and X is the number
of units necessary to reach the BEP.
Break-even sales dollars = price per unit multiplied by break-even sales units.
Use algebraic substitution to solve one of these equations:
FC
Break-even sales dollars = P x = Px
(P – V)
The answer shows the amount of revenue needed to break even.
Calculate the break-even sales dollars for the following example:
I’m selling a product for $15 per unit. My variable cost per unit is $7.
My fixed costs are $9,000. What is my break-even sales dollar figure?
Solution:
First, calculate the break-even sales units (X):
P = 15
V = 7
FC = 9000
FC
X =
(P – V)
9000 9000
X = =
(15 – 7) 8
X = 1125 units
Multiply the break-even sales units by price per unit to find the break-even
sales dollars.
Break-even sales dollars = 15 x 1125 = $16,875 in revenue.
12. 10 Assessment: Break-Even Point
1. Blue Corp. shows monthly fixed costs of $1,797 and per-unit cost of $9.28. It sells 411 units in a
month. What is the minimum price Blue Corp. must sell each unit for to break even?
2. A start-up company has the following expenses:
Rent = $1,100
Utilities = $265
Material and assembly = $12.65/unit
Monthly labor = $625
If its product sells for $29.99/unit, how many units must it sell to break even?
3. I sell a product for $24.75 and fill orders averaging 37 units per day. My cost to produce
and assemble each item is $3.11. If I am open for business five days per week, what is my
contribution margin per unit?
4. What is the break-even sales dollars figure for an operation that sells 615 products at $17.50 if
each item costs $7.05 to produce and the fixed costs for the operation are $3,700/month?
5. A company sells 900 units/month at $49.99 each, with an $18.12 per-unit cost and $2,175
monthly fixed costs. Is this company making a profit?
6. Tandem Trucking spends $11,455 per month to run its business. It makes an average of 420
deliveries per month at a fee of $55 per delivery. Rounded to the nearest percent, what is
Tandem’s monthly return on its $11,455 investment?
Assessment: Break-Even Point
Name Date
13. 11 Assessment: Break-Even Point
7. I sell a product for $35. My fixed costs for the week are $194, and it costs me $2.10 per unit to
produce the product. If I sell only 6 units this week, how am I doing?
8. Zyleron Corp. shows monthly fixed costs of $37,210 and a per-unit cost of $34.79. It sells 275
units in a month. What is the minimum price Zyleron Corp. must sell each unit for to break
even?
9. A start-up company has the following expenses:
Rent = $875
Utilities = $115
Material and assembly = $4.75/unit
Monthly labor = $480
If its product sells for $18.99/unit, how many units must it sell to break even?
10. I sell a product for $21.50 and fill orders averaging 19 units per day. My cost to produce
and assemble each item is $8.47. If I am open for business five days per week, what is my
contribution margin each week?
Name Date
14. 12 Assessment Solutions: Break-Even Point
1. Blue Corp. shows monthly fixed costs of $1,797 and per-unit cost of $9.28. It sells 411 units
in a month. What is the minimum price Blue Corp. must sell each unit for to break even?
FC = 1797
V = 9.28
X = 411
Px = FC + Vx
P(411) = 1797 +9.28(411) = 411P = 5611.08
5611.08
P =
411
P = $13.65
2. A start-up company has the following expenses:
Rent = $1,100
Utilities = $265
Material and assembly = $12.65/unit
Monthly labor = $625
If its product sells for $29.99/unit, how many units must it sell to break even?
FC = rent + utilities + labor = 1100 + 265 + 625 = 1990
V = 12.65
P = 29.99
FC
X =
(P – V)
1990 1990
X = =
(29.99 – 12.65) 17.34
X = 114.76 = 115 units
Assessment Solutions: Break-Even Point
Break-Even Point
15. 13 Assessment Solutions: Break-Even Point
3. I sell a product for $24.75 and fill orders averaging 37 units per day. My cost to produce
and assemble each item is $3.11. If I am open for business five days per week, what is my
contribution margin per unit?
P = 24.75
X = 1 unit
V = 3.11
Contribution margin = Revenue – Variable cost
CM = Px – Vx
CM = 24.75(1) – 3.11(1)
CM = $21.64/unit
4. What is the break-even sales dollar figure for an operation that sells 615 products at $17.50 if
each item costs $7.05 to produce and the fixed costs for the operation are $3,700/month?
P = 17.50
V = 7.05
FC = 3700
FC
X =
(P – V)
3700 3700
X = =
(17.50 – 7.05) 10.45
X = 354 break-even sales units
Break-even sales dollars = 354 x $17.50 = $6,195
5. A company sells 900 units/month at $49.99 each, with an $18.12 per-unit cost and $2,175
monthly fixed costs. Is this company making a profit?
X = 900
P = 49.99
V = 18.12
FC = 2175
Px = FC + Vx + Profit
(49.99) x 900 = 2175 + (18.12) 900 = 2175 + 16308 + Profit
44991 = 18483 + Profit
Profit = 44991 – 18483
Yes; profit = $26,508.
Break-Even Point
16. 14
6. Tandem Trucking spends $11,455 per month to run its business. It makes an average of 420
deliveries per month at a fee of $55 per delivery. Rounded to the nearest percent, what is
Tandem’s monthly return on its $11,455 investment?
FC = 11455
X = 420
P = 55
55(420) = 11455 + Profit
23100 = 11455 + Profit
Profit = 23100 – 11455
Profit = $11,645
Profit
Return =
Investment
11645
Return = = 1.0166 = 1.02
11455
Return = 102%
7. I sell a product for $35. My fixed costs for the week are $194, and it costs me $2.10 per unit
to produce the product. If I sell only 6 units this week, how am I doing?
P = 35
FC = 194
V = 2.10
X = 6
Px = FC + Vx + Profit
35(6) = 194 + 2.10(6) + Profit
210 = 194 + 12.60 + Profit
210 = 206.60 + Profit
Profit = 210 – 206.60
Profit = $3.40
I broke even with a slight profit of $3.40.
Break-Even Point
Assessment Solutions: Break-Even Point
17. 15
8. Zyleron Corp. shows monthly fixed costs of $37,210 and a per-unit cost of $34.79. It sells 275
units in a month. What is the minimum price Zyleron Corp. must sell each unit for to break
even?
FC = 37210
V = 34.79
X = 275
Px = FC + Vx
P(275) = 37210 + 34.79(275) = 275P = 46777.25
46777.25
P =
275
P = $170.10
9. A start-up company has the following expenses:
Rent = $875
Utilities = $115
Material and assembly = $4.75/unit
Monthly labor = $480
If its product sells for $18.99/unit, how many units must it sell to break even?
FC = rent + utilities + labor = 875 + 115 + 480 = 1470
V = 4.75
P = 18.99
FC
X =
(P – V)
1470 1470
X = = 103.23
(18.99 – 4.75) 14.24
X = 103 units
Break-Even Point
Assessment Solutions: Break-Even Point
18. 16
10. I sell a product for $21.50 and fill orders averaging 19 units per day. My cost to produce
and assemble each item is $8.47. If I am open for business five days per week, what is my
contribution margin each week?
P = 21.50
X = 19 x 5 = 95/week
V = 8.47
Contribution margin = Revenue – Variable cost
CM = Px – Vx
CM = (21.50)(95) – 8.47(95)
CM = 2042.50 – 804.65
CM = $1,237.85/week
Assessment Solutions: Break-Even Point
Break-Even Point