1
Bre Break even ven Anal Analy ysis Variable cost
2003
2004
2006
Years
COGS Commisions
4,326,000 429,000
4,132,000 405,000
5,570,000 536,000
Total
4,755,000
4,537,000
6,106,000
Sales Variable c Contributi Fixed cost
Fixed Cost
2003
2004
2006
Salaries Advertisments Adm. Expenses Rent Depreciation Misc Expenses
2,021,000 254,000 418,000 420,000 84,000 53,000
2,081,000 250,000 425,000 420,000 84,000 93,000
3,215,000 257,000 435,000 840,000 142,000 122,000
Total
3,250,000
3,353,000
5,011,000
Net
No. of sal Break Eve (Fixed Cos Average S Break Eve (Units * A Margin of (=) Sales -
2
Years No. of sale tickets
2006 7,500
Break Even point ( units ) (Fixed Cost/Contribution per unit)
8,161
Average Sales ticket
1,398
Break Even point ( $ ) (Units * Average sales ticket)
3
11,406,962
Sales commision = 0 So, Variable Cost = COGS
Years Sales Variable cost (-) Contribution Fixed costs (-) Net
2006 10,711,000 5,570,000 5,141,000 5,011,000 130,000
Years No. of sale tickets
2006 6,897
Break Even point ( units ) (Fixed Cost/Contribution per unit)
6,723
Average Sales ticket
1,553
Break Even point ( $ )
10,440,192
(Units * Average sales ticket)
4
Increase in Advertisement expense
Total Fixed Cost
=
200,000
2006
Salaries Advertisments Adm. Expenses Rent Depreciation Misc Expenses
3,215,000 457,000 435,000 840,000 142,000 122,000
Total
5,211,000
Years
2006
Sales Variable cost (-) Contribution Fixed costs (-) Net Income
10,711,000 6,106,000 4,605,000 5,211,000 -606,000
Years No. of sale tickets
2006 6,897
Break Even point ( units )
7,805
(Fixed Cost/Contribution per unit)
Average Sales ticket Break Even point ( $ ) (Units * Average sales ticket)
5
1,553 12,120,572
Assuming - All details same in 2007 as was in 2006
YEARS Sales COGS Gross Margin
2006 10,711,000 5,570,000 5,141,000
Expenses Commissions Salaries Advertising Admin Expense Rent Depreciation Misc. Expenses
536,000 3,215,000 257,000 435,000 840,000 142,000 122,000
Total
5,547,000
2007
Net Income (Gross Margin - Total Expenses) Fixed Cost
5,011,000
Unit Contribution Margin
0.667682
CM ratio Break Even Point (sales ticket) ( total fixed cost/unit contribution margin) Break Even Point (in dollars) (fixed cost/CM ratio) New Avg. Sales ticket Old Avg. Sales ticket Percent increase in avg. sales of ticket to break even
-406,000
0.4299 7505 11655 1690 1553 8.8134
2003
2004
2006
8,583,000 4,755,000 3,828,000 3,250,000
8,102,000 4,537,000 3,565,000 3,353,000
10,711,000 6,106,000 4,605,000 5,011,000
578,000
212,000
-406,000
tickets
5,341
5,316
6,897
point ( units ) /Contribution per unit)
4,535
5,000
7,505
les ticket
1,607
1,524
1,553
7,287,019
7,619,807
11,655,380
1,295,981
482,193
-944,380
st (-) on s (-)
point ( $ ) erage sales ticket) safety Break even sales
