Break-even analysis of a fictional business A break-even analysis is an analysis to determine the point at which revenue received equals the costs associat

Break-even analysis of a fictional business A break-even analysis is an analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even analysis calculates what is known as a margin of safety, the amount that revenues exceed the break-even point.

What to write: Word Document

Create and name your own business (fictional business with made-up data sets)
Describe your business’ mission statement: provide a one sentence “formal summary of the aims and values of a company, organization, or individual.”
Business operation description for break-even analysis
Describe your product
Discuss Fixed Costs (land, factory/plant, equipment, etc.)
Discuss Variable Costs (labor, materials/parts, power supply, water, etc.)
Use the formula provided in the excel sheet below. How are the data tables designed using the formula?
How are the results of the tables designed using the formula?
Your decision-making guidelines
Which data table is suitable for your business?
Where is the break-even point – the number of units sold?
When do you need to make the break-even point; 3 months, 6 months, 1 year? Explain why.
Data Tables – copy and paste both tables: data table 1 and data table 2
Screenshots (alt + PrtScn, then paste it to your Word doc) of Excel Sheet with Charts

What to use: Excel File

Open Excel file attached.
According to your business product, update both data tables. You can focus on the red italicized costs in the tables shown below. You must change all numbers.
All the numbers MUST be different from the sample sheet.
Data Table 1: Fixed Variable Costs, Changing Sell Prices
Unit Sold Fixed Costs Variable Costs Sell Price Profit Contribution
1 $2,500.00 $300.00 $445.00 $145.00
1 $2,500.00 $300.00 $485.00 $185.00
1 $2,500.00 $300.00 $525.00 $225.00
1 $2,500.00 $300.00 $565.00 $265.00
1 $2,500.00 $300.00 $605.00 $305.00
Data Table 2: Changing Variable Costs, Fixed Sell Prices
Units Sold Fixed Costs Variable Costs Sell Price Profit Contribution
1 $2,500.00 $300.00 $445.00 $145.00
1 $2,500.00 $280.00 $445.00 $165.00
1 $2,500.00 $260.00 $445.00 $185.00
1 $2,500.00 $240.00 $445.00 $205.00
1 $2,500.00 $220.00 $445.00 $225.00

Let me know if you have any questions, Source: http://www.driveyoursuccess.com/2011/03/sample-break-even-excel-sheet-for-small-businesses.html
Units Sold
1
1
1
1
1
$
$
$
$
$
Units Sold
Fixed Costs
2.500,00
2.500,00
2.500,00
2.500,00
2.500,00
Fixed Costs
Variable Costs
$
300,00
$
300,00
$
300,00
$
300,00
$
300,00
$
$
$
$
$
Sell Price $445
Profit Contribution
1
Sell Price $485
Sell Price $525
Profit
Sell Price $565
Profit Contribution 2
Contribution 3
Profit Contribution 4
Sell Price
445,00
485,00
525,00
565,00
605,00
$
$
$
$
$
Profit Contribution
145,00
185,00
225,00
265,00
305,00
1
$
2.500,00
$
145,00
$
185,00
$
225,00
$
265,00
2
$
2.500,00
$
290,00
$
370,00
$
450,00
$
530,00
3
$
2.500,00
$
435,00
$
555,00
$
675,00
$
795,00
4
$
2.500,00
$
580,00
$
740,00
$
900,00
$
1.060,00
5
$
2.500,00
$
725,00
$
925,00
$
1.125,00
$
1.325,00
6
$
2.500,00
$
870,00
$
1.110,00
$
1.350,00
$
1.590,00
7
$
2.500,00
$
1.015,00
$
1.295,00
$
1.575,00
$
1.855,00
8
$
2.500,00
$
1.160,00
$
1.480,00
$
1.800,00
$
2.120,00
9
$
2.500,00
$
1.305,00
$
1.665,00
$
2.025,00
$
2.385,00
10
$
2.500,00
$
1.450,00
$
1.850,00
$
2.250,00
$
2.650,00
11
$
2.500,00
$
1.595,00
$
2.035,00
$
2.475,00
$
2.915,00
12
$
2.500,00
$
1.740,00
$
2.220,00
$
2.700,00
$
3.180,00
13
$
2.500,00
$
1.885,00
$
2.405,00
$
2.925,00
$
3.445,00
14
$
2.500,00
$
2.030,00
$
2.590,00
$
3.150,00
$
3.710,00
15
$
2.500,00
$
2.175,00
$
2.775,00
$
3.375,00
$
3.975,00
16
$
2.500,00
$
2.320,00
$
2.960,00
$
3.600,00
$
4.240,00
17
$
2.500,00
$
2.465,00
$
3.145,00
$
3.825,00
$
4.505,00
18
$
2.500,00
$
2.610,00
$
3.330,00
$
4.050,00
$
4.770,00
19
$
2.500,00
$
2.755,00
$
3.515,00
$
4.275,00
$
5.035,00
20
$
2.500,00
$
2.900,00
$
3.700,00
$
4.500,00
$
5.300,00
21
$
2.500,00
$
3.045,00
$
3.885,00
$
4.725,00
$
5.565,00
22
$
2.500,00
$
3.190,00
$
4.070,00
$
4.950,00
$
5.830,00
23
$
2.500,00
$
3.335,00
$
4.255,00
$
5.175,00
$
6.095,00
24
$
2.500,00
$
3.480,00
$
4.440,00
$
5.400,00
$
6.360,00
25
$
2.500,00
$
3.625,00
$
4.625,00
$
5.625,00
$
6.625,00
$
$
$
Fixed Costs
2.500,00
2.500,00
2.500,00
Variable Costs
$
300,00
$
280,00
$
260,00
$
$
$
Sell Price
445,00
445,00
445,00
$
$
$
Profit Contribution
145,00
165,00
185,00
Units Sold
1
1
1
1
1
$
$
Units Sold
2.500,00
2.500,00
Fixed Costs
$
$
240,00
220,00
Variable Costs
$300 Profit
Contribution 1
$
$
445,00
445,00
$
$
Variable Costs $280
Profit Contribution 2
205,00
225,00
Variable Costs
$240 Profit
Contribution 4
Variable Costs $260
Profit Contribution 3
1
$
2.500,00
$
145,00
$
165,00
$
185,00
$
205,00
2
$
2.500,00
$
290,00
$
330,00
$
370,00
$
410,00
3
$
2.500,00
$
435,00
$
495,00
$
555,00
$
615,00
4
$
2.500,00
$
580,00
$
660,00
$
740,00
$
820,00
5
$
2.500,00
$
725,00
$
825,00
$
925,00
$
1.025,00
6
$
2.500,00
$
870,00
$
990,00
$
1.110,00
$
1.230,00
7
$
2.500,00
$
1.015,00
$
1.155,00
$
1.295,00
$
1.435,00
8
$
2.500,00
$
1.160,00
$
1.320,00
$
1.480,00
$
1.640,00
9
$
2.500,00
$
1.305,00
$
1.485,00
$
1.665,00
$
1.845,00
10
$
2.500,00
$
1.450,00
$
1.650,00
$
1.850,00
$
2.050,00
11
$
2.500,00
$
1.595,00
$
1.815,00
$
2.035,00
$
2.255,00
12
$
2.500,00
$
1.740,00
$
1.980,00
$
2.220,00
$
2.460,00
13
$
2.500,00
$
1.885,00
$
2.145,00
$
2.405,00
$
2.665,00
14
$
2.500,00
$
2.030,00
$
2.310,00
$
2.590,00
$
2.870,00
15
$
2.500,00
$
2.175,00
$
2.475,00
$
2.775,00
$
3.075,00
16
$
2.500,00
$
2.320,00
$
2.640,00
$
2.960,00
$
3.280,00
17
$
2.500,00
$
2.465,00
$
2.805,00
$
3.145,00
$
3.485,00
18
$
2.500,00
$
2.610,00
$
2.970,00
$
3.330,00
$
3.690,00
19
$
2.500,00
$
2.755,00
$
3.135,00
$
3.515,00
$
3.895,00
20
$
2.500,00
$
2.900,00
$
3.300,00
$
3.700,00
$
4.100,00
21
$
2.500,00
$
3.045,00
$
3.465,00
$
3.885,00
$
4.305,00
22
$
2.500,00
$
3.190,00
$
3.630,00
$
4.070,00
$
4.510,00
23
$
2.500,00
$
3.335,00
$
3.795,00
$
4.255,00
$
4.715,00
24
$
2.500,00
$
3.480,00
$
3.960,00
$
4.440,00
$
4.920,00
25
$
2.500,00
$
3.625,00
$
4.125,00
$
4.625,00
$
5.125,00
usinesses.html
Sell Price $605
Profit Contribution
5
$9.000,00
$
305,00
$
610,00
$
915,00
$
1.220,00
$
1.525,00
$
1.830,00
$
2.135,00
$
2.440,00
$
2.745,00
$
3.050,00
$
3.355,00
$
3.660,00
$
3.965,00
$
4.270,00
$
4.575,00
$
4.880,00
$
5.185,00
$
5.490,00
$
5.795,00
$
6.100,00
$
6.405,00
$
6.710,00
$
7.015,00
$
7.320,00
Fixed Costs
$
7.625,00
Sell Price $485
$8.000,00
$7.000,00
$6.000,00
$5.000,00
$4.000,00
$3.000,00
$2.000,00
$1.000,00
$1
2
3
4
5
6
Sell Price $565
7
8
9 10 11 12 13 14 15 16 17
Sell Price $445
Profit Contribution 2
Profit Contribution 4
Profit Contribution 1
Sell Price $525
Profit Contribution 3
Sell Price $605
Profit Contribution 5
Variable Costs
$220 Profit
Contribution 5
$
225,00
$
450,00
$
675,00
$
900,00
$
1.125,00
$
1.350,00
$
1.575,00
$
1.800,00
$
2.025,00
$
2.250,00
$
2.475,00
$
2.700,00
$
2.925,00
$
3.150,00
$
3.375,00
$
3.600,00
$
3.825,00
$
4.050,00
$
4.275,00
$
4.500,00
$
4.725,00
$
4.950,00
$
5.175,00
$
5.400,00
$
5.625,00
$6.000,00
$5.000,00
$4.000,00
$3.000,00
$2.000,00
$1.000,00
$0,00
1
2
3
4
5
6
7
8
9 10 11 12 13 14 15 16 17
Fixed Costs
Variable Costs $300
Profit Cont
Variable Costs $280
Profit Contribution 2
Variable Costs $260
Profit Contr
Variable Costs $240
Profit Contribution 4
Variable Costs $220
Profit Contr
16 17 18 19 20 21 22 23 24 25
Sell Price $445
Profit Contribution 1
Sell Price $525
Profit Contribution 3
Sell Price $605
Profit Contribution 5
16 17 18 19 20 21 22 23 24 25
Variable Costs $300
Profit Contribution 1
Variable Costs $260
Profit Contribution 3
Variable Costs $220
Profit Contribution 5
Source: http://www.driveyoursuccess.com/2011/03/sample-break-even-excel-sheet-for-small-businesses.html
Units Sold
1
1
1
1
1
$
$
$
$
$
Units Sold
Fixed Costs
2.500,00
2.500,00
2.500,00
2.500,00
2.500,00
Fixed Costs
Variable
Costs
$ 300,00
$ 300,00
$ 300,00
$ 300,00
$ 300,00
Sell Price
$ 445,00
$ 485,00
$ 525,00
$ 565,00
$ 605,00
Profit
Contributio
n
$ 145,00
$ 185,00
$ 225,00
$ 265,00
$ 305,00
Sell Price
Sell Price
Sell Price
Sell Price
Sell Price
$445
$485
$525
$565
$605
Profit
Profit
Profit
Profit
Profit
Contribution Contribution Contribution Contribution Contribution
1
2
3
4
5
1
$
2.500,00
$
145,00
$
185,00
$
225,00
$
265,00
$
305,00
2
$
2.500,00
$
290,00
$
370,00
$
450,00
$
530,00
$
610,00
3
$
2.500,00
$
435,00
$
555,00
$
675,00
$
795,00
$
915,00
4
$
2.500,00
$
580,00
$
740,00
$
900,00
$ 1.060,00
$ 1.220,00
5
$
2.500,00
$
725,00
$
925,00
$ 1.125,00
$ 1.325,00
$ 1.525,00
6
$
2.500,00
$
870,00
$ 1.110,00
$ 1.350,00
$ 1.590,00
$ 1.830,00
7
$
2.500,00
$ 1.015,00
$ 1.295,00
$ 1.575,00
$ 1.855,00
$ 2.135,00
8
$
2.500,00
$ 1.160,00
$ 1.480,00
$ 1.800,00
$ 2.120,00
$ 2.440,00
9
$
2.500,00
$ 1.305,00
$ 1.665,00
$ 2.025,00
$ 2.385,00
$ 2.745,00
10
$
2.500,00
$ 1.450,00
$ 1.850,00
$ 2.250,00
$ 2.650,00
$ 3.050,00
11
$
2.500,00
$ 1.595,00
$ 2.035,00
$ 2.475,00
$ 2.915,00
$ 3.355,00
12
$
2.500,00
$ 1.740,00
$ 2.220,00
$ 2.700,00
$ 3.180,00
$ 3.660,00
13
$
2.500,00
$ 1.885,00
$ 2.405,00
$ 2.925,00
$ 3.445,00
$ 3.965,00
14
$
2.500,00
$ 2.030,00
$ 2.590,00
$ 3.150,00
$ 3.710,00
$ 4.270,00
15
$
2.500,00
$ 2.175,00
$ 2.775,00
$ 3.375,00
$ 3.975,00
$ 4.575,00
16
$
2.500,00
$ 2.320,00
$ 2.960,00
$ 3.600,00
$ 4.240,00
$ 4.880,00
17
$
2.500,00
$ 2.465,00
$ 3.145,00
$ 3.825,00
$ 4.505,00
$ 5.185,00
18
$
2.500,00
$ 2.610,00
$ 3.330,00
$ 4.050,00
$ 4.770,00
$ 5.490,00
19
$
2.500,00
$ 2.755,00
$ 3.515,00
$ 4.275,00
$ 5.035,00
$ 5.795,00
20
$
2.500,00
$ 2.900,00
$ 3.700,00
$ 4.500,00
$ 5.300,00
$ 6.100,00
21
$
2.500,00
$ 3.045,00
$ 3.885,00
$ 4.725,00
$ 5.565,00
$ 6.405,00
22
$
2.500,00
$ 3.190,00
$ 4.070,00
$ 4.950,00
$ 5.830,00
$ 6.710,00
23
$
2.500,00
$ 3.335,00
$ 4.255,00
$ 5.175,00
$ 6.095,00
$ 7.015,00
24
$
2.500,00
$ 3.480,00
$ 4.440,00
$ 5.400,00
$ 6.360,00
$ 7.320,00
25
$
2.500,00
$ 3.625,00
$ 4.625,00
$ 5.625,00
$ 6.625,00
$ 7.625,00
$9.000,00
$8.000,00
$7.000,00
$6.000,00
$5.000,00
$4.000,00
$3.000,00
$2.000,00
$1.000,00
$1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Fixed Costs
Sell Price $485
Sell Price $565
Sell Price $445
Profit Contribution 2
Profit Contribution 4
Profit Contribution 1
Sell Price $525
Profit Contribution 3
Sell Price $605
Profit Contribution 5
23 24 25
Units Sold
1
1
1
1
1
$
$
$
$
$
Units Sold
Fixed Costs Variable CostsSell Price
Profit Contribution
2.500,00 $ 300,00 $ 445,00 $ 145,00
2.500,00 $ 280,00 $ 445,00 $ 165,00
2.500,00 $ 260,00 $ 445,00 $ 185,00
2.500,00 $ 240,00 $ 445,00 $ 205,00
2.500,00 $ 220,00 $ 445,00 $ 225,00
Fixed Costs
Variable
Variable
Variable
Variable
Variable
Costs $300 Costs $280 Costs $260 Costs $240 Costs $220
Profit
Profit
Profit
Profit
Profit
Contribution Contribution Contribution Contribution Contribution
1
2
3
4
5
1
$
2.500,00
$
145,00
$
165,00
$
185,00
$
205,00
$
225,00
2
$
2.500,00
$
290,00
$
330,00
$
370,00
$
410,00
$
450,00
3
$
2.500,00
$
435,00
$
495,00
$
555,00
$
615,00
$
675,00
4
$
2.500,00
$
580,00
$
660,00
$
740,00
$
820,00
$
900,00
5
$
2.500,00
$
725,00
$
825,00
$
925,00
$ 1.025,00
$ 1.125,00
6
$
2.500,00
$
870,00
$
990,00
$ 1.110,00
$ 1.230,00
$ 1.350,00
7
$
2.500,00
$ 1.015,00
$ 1.155,00
$ 1.295,00
$ 1.435,00
$ 1.575,00
8
$
2.500,00
$ 1.160,00
$ 1.320,00
$ 1.480,00
$ 1.640,00
$ 1.800,00
9
$
2.500,00
$ 1.305,00
$ 1.485,00
$ 1.665,00
$ 1.845,00
$ 2.025,00
10
$
2.500,00
$ 1.450,00
$ 1.650,00
$ 1.850,00
$ 2.050,00
$ 2.250,00
11
$
2.500,00
$ 1.595,00
$ 1.815,00
$ 2.035,00
$ 2.255,00
$ 2.475,00
12
$
2.500,00
$ 1.740,00
$ 1.980,00
$ 2.220,00
$ 2.460,00
$ 2.700,00
13
$
2.500,00
$ 1.885,00
$ 2.145,00
$ 2.405,00
$ 2.665,00
$ 2.925,00
14
$
2.500,00
$ 2.030,00
$ 2.310,00
$ 2.590,00
$ 2.870,00
$ 3.150,00
15
$
2.500,00
$ 2.175,00
$ 2.475,00
$ 2.775,00
$ 3.075,00
$ 3.375,00
16
$
2.500,00
$ 2.320,00
$ 2.640,00
$ 2.960,00
$ 3.280,00
$ 3.600,00
17
$
2.500,00
$ 2.465,00
$ 2.805,00
$ 3.145,00
$ 3.485,00
$ 3.825,00
18
$
2.500,00
$ 2.610,00
$ 2.970,00
$ 3.330,00
$ 3.690,00
$ 4.050,00
19
$
2.500,00
$ 2.755,00
$ 3.135,00
$ 3.515,00
$ 3.895,00
$ 4.275,00
20
$
2.500,00
$ 2.900,00
$ 3.300,00
$ 3.700,00
$ 4.100,00
$ 4.500,00
21
$
2.500,00
$ 3.045,00
$ 3.465,00
$ 3.885,00
$ 4.305,00
$ 4.725,00
22
$
2.500,00
$ 3.190,00
$ 3.630,00
$ 4.070,00
$ 4.510,00
$ 4.950,00
23
$
2.500,00
$ 3.335,00
$ 3.795,00
$ 4.255,00
$ 4.715,00
$ 5.175,00
24
$
2.500,00
$ 3.480,00
$ 3.960,00
$ 4.440,00
$ 4.920,00
$ 5.400,00
25
$
2.500,00
$ 3.625,00
$ 4.125,00
$ 4.625,00
$ 5.125,00
$ 5.625,00
$6.000,00
$5.000,00
$4.000,00
$3.000,00
$2.000,00
$1.000,00
$0,00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Fixed Costs
Variable Costs $300
Profit Contribution 1
Variable Costs $280
Profit Contribution 2
Variable Costs $260
Profit Contribution 3
Variable Costs $240
Profit Contribution 4
Variable Costs $220
Profit Contribution 5
23 24 25

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