Break-Even Analysis Example
X axis = Units/Product Numbers
Y axis = Money
Forecast Output = 50,000
Fixed Costs = €160,000
Selling Price = €20
Variable Cost = €12
Selling Price - Variable Cost = Contribution
20 - 12 = 8
Contribution = €8
20 x 5,000 = 100,000
12 x 5,000 = 60,000 + 160,000 = 220,000
Break-even point (BEP) = €400,000
20,000
BEP is the point where Total Revenue and Total Cost meets
Margin of Safety
- 50,000 x €20 = €1,000,000
- 50,000 x €12 = €600,000 + €160,000 = €760,000
- €1,000,000 - €760,000 = €240,000
Extra Graph
Second Break-Even Analysis Example
Forecast Output = 30,000
Fixed Costs = €160,000
Selling Price = €15
Variable Cost = €12
15 - 12 = €3
Total Costs = F.C. + V.C.
| V.C. | F.C. | T.C. |
|---|---|---|
| 12 x 5,000 = 60,000 | + 200,000 | = 260,000 |
| 12 x 10,000 = 120,000 | + 200,000 | = 320,000 |
| 12 x 15,000 = 180,000 | + 200,000 | = 380,000 |
| 12 x 20,000 = 240,000 | + 200,000 | = 440,000 |
| 12 x 25,000 = 300,000 | + 200,000 | = 500,000 |
| 12 x 30,000 = 360,000 | + 200,000 | = 560,000 |
15 x 5,000 = 75,000
15 x 10,000 = 150,000
15 x 15,000 = 225,000
15 x 20,000 = 300,000
15 x 25,000 = 375,000
15 x 30,000 = 450,000
B.E.P = N/A
Margin of Safety = N/A
Profit = €0
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