1.Easy
A company sells a product for €33 per unit. The variable cost is €25 per unit and fixed costs are €40 000 per month. How many units Q must it sell per month to break even?
F = €40 000p = €33v = €25
Q = units
Break-even analysis worksheet with answers
2.Easy
A shop has fixed costs of €20 000 per year. Its variable costs are 45% of sales revenue. What sales revenue S does it need per year to break even?
F = €20 000variable costs = 45% · S
S = €
3.Medium
A product sells for €14 per unit with a variable cost of €4 per unit. Fixed costs are €20 000 per month. How many units Q must be sold per month to make a profit of €12 000?
F = €20 000p = €14v = €4profit = €12 000
Q = units
4.Medium
A company sells 6 250 units at €10 each. The variable cost is €6 per unit and fixed costs are €10 000. Find the degree of operating leverage DOL at this sales level.
Q = 6 250p = €10v = €6F = €10 000
DOL =
5.Hard
A company sells 800 units at €16 each, with a variable cost of €12 per unit and fixed costs of €2 000. By what percentage %ΔΠ does operating profit change if sales volume rises by 10%?
Q = 800p = €16v = €12F = €2 000%ΔQ = +10%
%ΔΠ = %
6.Hard
A product sells for €42 per unit, with a variable cost of €30 per unit and fixed costs of €14 400 per year. Budgeted sales are 2 160 units. Find the margin of safety MS as a percentage of budgeted sales.
F = €14 400p = €42v = €30budget = 2 160
MS = %
Answer key
- 1. Q = 5000 units
- 2. S = 36364 €
- 3. Q = 3200 units
- 4. DOL = 1.667
- 5. %ΔΠ = 26.67 %
- 6. MS = 44.44 %
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