1.Easy
A company sells a product for €33 per unit. The variable cost is €18 per unit and fixed costs are €60 000 per month. How many units Q must it sell per month to break even?
F = €60 000p = €33v = €18
Q = units
Break-even analysis worksheet with answers
2.Easy
A product sells for €28 per unit. The variable cost is €8 per unit and the fixed costs are €40 000 per month. Find the monthly profit Π when 4 000 units are sold (a loss is negative).
p = €28v = €8F = €40 000Q = 4 000
Π = €
3.Medium
A company sells 8 000 units at €37 each. The variable cost is €25 per unit and fixed costs are €60 000. Find the degree of operating leverage DOL at this sales level.
Q = 8 000p = €37v = €25F = €60 000
DOL =
4.Medium
A product sells for €60 with a variable cost of €45 per unit. Fixed costs are €37 500 per month and profit is taxed at 20%. How many units Q must be sold per month to earn €7 500 after tax?
p = €60v = €45F = €37 500T = 20%after-tax profit = €7 500
Q = units
5.Hard
A product sells for €10 per unit, with a variable cost of €6 per unit and fixed costs of €8 000 per year. Budgeted sales are 3 000 units. Find the margin of safety MS as a percentage of budgeted sales.
F = €8 000p = €10v = €6budget = 3 000
MS = %
6.Hard
A product sells for €35 per unit, with a variable cost of €30 per unit and fixed costs of €12 500 per year. Budgeted sales are 4 500 units. Find the margin of safety MS as a percentage of budgeted sales.
F = €12 500p = €35v = €30budget = 4 500
MS = %
Answer key
- 1. Q = 4000 units
- 2. Π = 40000 €
- 3. DOL = 2.667
- 4. Q = 3125 units
- 5. MS = 33.33 %
- 6. MS = 44.44 %
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