ENTREPRENEURSHIP 470 BREAKEVEN ANALYSIS EXERCISE (CASE STUDY) (LeBlanc, Inc.) Using the attached spreadsheet for Ms. LeBlanc, classify each of his variable costs and fixed costs by denoting a "V" in the blank column next to each applicable cost description, then total cach category and show below: Variable Cost.... . Fixed Cost............5 Net Sales.. What are the break-even sales for the company in the first year? If Ms. LeBlanc wanted to generate a 550,000 profit, what amount of total sales would she need? Ir Ms. LeBlanc decided to hire another part-time worker for the business, who will work 10 hours per week and be paid $11.00 per hour, how much in additional annual sales would she need to generate to cover this wage expense? (MS. LEBLANC, INC.) MONTHLY INCOME STATEMENT PROJECTIONS For Period Ending Year Total GROSS REVENUE Sales or Fees); 324,165 27,552 296,613 207,631 88.982 100.0% 8.5% 100.0% 70.0% 30.0% 17,160 5.8% TOTAL GROSS REVENUE Less Returns, Allowances, & Discounts NET SALES REVENUE Less COST OF GOODS SOLD: GROSS PROFIT JOPERATING EXPENSES: Salaries Wages Commissions Payroll Taxes & Benefits Security Promotion (advertising, etc) Vehicle & Delivery Dues & Subscriptions Accounting & Legal Fees Office Supplies Operating Supplies Maintenance & Repairs Travel & Entertainment Rent Telephone Utilities 4,296 900 30,000 1.4% 0.3% 10.1% 540 900 300 0.2% 0.3% 0.1% 1,800 0.6% 18.000 1.440 5.400 4,500 6.1% 0.5% 1.8% 1.5% 6,624 4,864 2.2% 1.6% Taxes (property, etc.) Depreciation & Amortization Selling (check/credit card fee, etc.) Bad Debts Other (specify each) Miscellaneous TOTAL OPERATING EXPENSES Total Operating Income (EBIT + Other Revenue interest income, etc.) - Other Expenses (interest, etc.) NET PROFIT (LOSS) before taxes - Taxes NET PROFIT (LOSS) after taxes Owner's Withdrawal 96,724 7.742) 32.6% -2.6% 6,144 (13.886) 2.19% 4.7% 4.7% (13,886) 8,555