Break+Even+analysis

Break even Worksheet: An introduction to break even Scenario Donald Veezer is an entrepreneur who has decided to sell high quality tweezers to the cosmetics market. Using the market research conducted he has come up with the following costs:

(all figures are in $)

Rent/month 1,650.00 Packaging per pair of tweezers 1.50 Salaries/month 10,000.00 Production wages/pair of tweezers 0.50 Loan repayments/month 600.00 Raw materials/pair of tweezers 3.00 Telephone/month 150.00 Office supplies/month 100.00 Donald plans to sell the tweezers for $10 per unit.

Using the figures from the statement construct a break-even table using the sales figures 0, 1,000, 2,000, 3,000, 4,000, 5,000.


 * Output || <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">0 || <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">1,000 || <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">2,000 || <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">3,000 || <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">4,000 || <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">5,000 ||
 * <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">Fixed cost ||  ||   ||   ||   ||   ||   ||
 * <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">Variable cost ||  ||   ||   ||   ||   ||   ||
 * <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">Total cost ||  ||   ||   ||   ||   ||   ||
 * <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">Total revenue ||  ||   ||   ||   ||   ||   ||

<span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">Construct a break-even graph. Plotting only lines for fixed costs, total cost and total revenue.

<span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">Using the mathematical equation below for break even, work out the number of units to be sold in order to break even. (Show all your workings.)

<span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">Formula = <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px; line-height: 1.5;"> TFC/ Price-Variable cost per unit