Break Even Analysis Application Assignment

You have been in business for 6 months. During this time, you have decided to perform a break-even analysis to determine how many widgets you need to sell in order to break-even. In addition, you want to determine how much revenue needs to be generated before you start to see some profit. Utilize the information below to perform the calculations. Formulas are also provided below.

Break Even Analysis Part 1 (10 pts)

From Income Statement - Revenue - $95, 347.14

Cost of Goods Sold - $37,368.61

Cost of Goods % Formula for COGS in % (Cost of Good Sold / Revenue)

From Income Statement - Fixed Costs - $29,016.06

Contribution Margin - $ Formula for CM in $ (Revenue - Cost of Goods Sold)

Contribution Margin - % Formula for CM in % (Contribution Margin $ / Revenue)

Break-Even Analysis Part 2 (10 pts)

Average unit Price = $125.33

Average Cost of Goods = $44.17

Utilizing the Avg Unit Price and Avg Cost of Goods will tell you how many widgets need to be sold to break-even

Break-Even in Units = Fixed Costs / (Average Unit Price - Average Unit Cost of Goods) =

Utilizing the Fixed Costs and Contribution Margin in % will help to determine in Dollars the point at which you break-even

Break-Even in Dollars = Fixed Costs / Contribution Margin % =