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Table 1. Sensitivity Analysis for Normal Pizza's Breakeven Sales Breakeven Sales Price Unit Sales Change By Change By % (+) Higher or (-) Lower 0%
Table 1. Sensitivity Analysis for Normal Pizza's Breakeven Sales Breakeven Sales Price Unit Sales Change By Change By % (+) Higher or (-) Lower 0% Unit Sales Change -25% Variable Costs Fixed Costs Change By Change By -25% -25% +25% +25% S $ S 20,000 10.00 5.00 200,000 100,000 s 1 Unit Sales 2 Sales Price (Net) 3 vC per Unit 4 Annual Sales S 5 Annual Variable Costs Annual Contribution Margin S (4- 63) 7 Annual Fixed Cost s 8 Annual Net income or profit S (6-7) 9 Annual Net Income/Sales % (8/4) s 100,000 S 100,000 S 0.0% Refer to and understand the bulletin from Purdue University titled "Estimating Breakeven Sales for Your Small Business" for an example similar to the problem described below. Here is the basic starting information for estimating the breakeven for this business. Use it with the information given in Table 1 below to complete the 5 estimates of the impact on Net Income that would result from the "CHANGE" noted in the rows at the top of the table. Instructions Fill in each cell in the table below. Use the numbers given below to fill in the cells highlighted in green When finished, save the spreadsheet and email it to Dr. O'Rourke BEGINNING INFORMATION FOR NORMAL PIZZA BUSINESS Units of Sales of pizzas 20,000 Net Sales Price per pizza $ 10.00 Variable Costs per pizza $ 5.00 Annual Fixed Costs $100,000
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