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Managing a Business/Break Even Analysis

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Question
Calculate Break Even Point Sales and

Sales Required to earn a profit of $6000 per annum

Years   Total sales   Total cost
2010   $42500   $38700
2011   $39200   $36582

Answer
hello Danish

I assume this is an assighnment question and you are familiar with the breakeven equation. One thing I do not do is provide model answers to students.

What you have to do here is isolate the fixed compnent of the expenses which from the statistics given are very low, this is done by comparing the movement in cost between the two years relative to the movement in sales, you can then enter this data in the breakeven equation Assuming the expenses are entirely variable the answer might approximate $90,000

Managing a Business

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Brian Thompson

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My expertise extends to general management, financial management, corporate govenance and everyday managerial problem solving

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I have in excess of 30 years experience in the management of public and private organisations

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Revival ~ a different perspective

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B.Bus. FCPA, FCIS

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