1.Easy
A company sells a product for €27 per unit. The variable cost is €15 per unit and fixed costs are €14 400 per month. How many units Q must it sell per month to break even?
F = €14 400p = €27v = €15
Q = units
Break-even analysis worksheet with answers
2.Easy
A shop has fixed costs of €50 000 per year. Its variable costs are 50% of sales revenue. What sales revenue S does it need per year to break even?
F = €50 000variable costs = 50% · S
S = €
3.Medium
A company sells 2 400 units at €24 each. The variable cost is €12 per unit and fixed costs are €24 000. Find the degree of operating leverage DOL at this sales level.
Q = 2 400p = €24v = €12F = €24 000
DOL =
4.Medium
A product sells for €28 per unit with a variable cost of €8 per unit. Fixed costs are €30 000 per month. How many units Q must be sold per month to make a profit of €20 000?
F = €30 000p = €28v = €8profit = €20 000
Q = units
5.Hard
A product sells for €26 per unit, with a variable cost of €18 per unit and fixed costs of €20 000 per year. Budgeted sales are 3 250 units. Find the margin of safety MS as a percentage of budgeted sales.
F = €20 000p = €26v = €18budget = 3 250
MS = %
6.Hard
A product sells for €23 per unit, with a variable cost of €18 per unit and fixed costs of €2 500 per year. Budgeted sales are 900 units. Find the margin of safety MS as a percentage of budgeted sales.
F = €2 500p = €23v = €18budget = 900
MS = %
Answer key
- 1. Q = 1200 units
- 2. S = 100000 €
- 3. DOL = 6
- 4. Q = 2500 units
- 5. MS = 23.08 %
- 6. MS = 44.44 %
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