Fiscal Plan and Break-Even AnalysisNameCourse Name and NumberProfessorDate of SubmissionBreak-Even Analysis
| Break Down Computation for 6 Calendar months Ended June 2013 | ||||
| In Dollars | Unit of measurements | Per Unit | In Percentage | |
| Gross saless ( invoiced ) | $ 562,500.00 | 8500 | $ 66.18* | 100 % |
| Variable Cost | $ 84,170.00 | 8500 | $ 9.90 | 14.96 % |
| Contribution Margin | $ 478,330.00 | 8500 | $ 56.
28 |
85.04 % |
| Fixed Cost | $ 35,363.00 | |||
| Net Income | $ 442,967.00 | |||
In calculation of the Break-Even Point, there are two results that require analysis. These are the Break-Even Gross saless in Unit of measurements or Volume and Break-Even Gross saless in Dollars.
In Figure 1, the sums listed are derived from Net income and Loss Forecast subdivision of the excel file. All sums are prognosiss from January to June of 2013 including estimated set-up costs.Figure 1. Interrupt Down Computation for 6 Calendar months Ended June*Sales Price per Unit= Original Price x ( 100 % + Mark-Up Percentage )= $ 57.55 x 1.15=$ 66.18
| Fixed Costss | |||
| Wages and rewards | $ 18,000.00 | Repairs and care | $ 240.
00 |
| Ad | $ 1,200.00 | Marketing study | $ 300.00 |
| Rent | $ 1,800.00 | Design and testing | $ 400.00 |
| Equipment hire/lease | $ 5,000.00 | Patents | $ 150.00 |
| Depreciation | $ 100.00 | Copyright enrollment | $ 120.
00 |
| Electricity and gas | $ 1,000.00 | Recruitment and choice | $ 200.00 |
| Insurance | $ 1,200.00 | Water measures | $ 200.00 |
| Legal fees | $ 300.00 | Construction | $ 3,000.00 |
| Transport/courier costs | $ 540.
00 |
Office set up | $ 1,000.00 |
| Postage, telephone and facsimile | $ 190.00 | Distribution | $ 264.00 |
| Stationery | $ 159.
00 |
Entire Fixed Cost | $ 35,363.00 |
Figure 2. Composition of Entire Fixed CostssThe company incurred entire fixed costs of $ 35,363.00 for its iScent Alarm Clocks from January to June of 2013. Variable cost is $ 9.
9 per unit which is 14.96 % of the gross revenues monetary value per unit. The iScent Alarm Clock has an original monetary value of $ 57.55. Given the proposed mark-up monetary value of 15 % , the new monetary value of iScent Alarm Clock is $ 66.18 per unit. Hence, the company will sell an iScent Alarm Clock for $ 57.
55 for retail merchants and jobbers while $ 66.18 for every individual purchase of clients. Furthermore, the mark-up per centum of 15 % can cover unforeseen or unanticipated product-related costs that may originate in future. Using informations provided in Figure 1, below is the calculation of break-even point in units and in dollars.
| Break-Even Point in Units = | Entire Fixed Cost | |||
| Gross saless Price per Unit – Variable Cost Per Unit | ||||
| Break-Even Point in Units = | $ 35,363.00 | |||
| $ 66.
18 – $ 9.9 |
||||
| Break-Even Point in Units = | 628.34 units | |||
| Break-Even Point in Dollars = | $ 41,583.57 | |||
| ( $ 628.34 units x $ 66.18 ) | ||||
Figure 3. Break-Even Point CalculationIn Figure 3, the break-even points are 628.34 units and $ 41,583.
57. It means that the company must sell 628.34 units of iScent Alarm Clock within six months to retrieve the cost of bring forthing those alarm redstem storksbills or to merely break-even. To farther explain ; if the company produced and sold 628.34 pieces of iScent Alarm Clock, each of these units will cover the fringy or variable costs of $ 84,170.00 every bit good as all associated fixed costs of $ 35,363.00. If the company sells 628.
34 iScent Alarm Clocks, so it will non see a loss. Upon selling more than 628.34 units, all fixed costs have been settled, and each unit contributes to net incomes by the part border. Hence, if the company sells more than 628.34 units, it will be considered as income for the company.
The Break-Even Point in Dollars of $ 41,583.57 is merely the monetary value of 628.34 units when sold.
| Unit of measurements | Gross saless Gross | Variable Cost | Contribution Margin | Fixed Cost | Entire Cost | Net Income |
| 100 | 6618 | 990 | 5628 | 35,363.00 | 36,353.00 | -29,735.
00 |
| 200 | 13236 | 1980 | 11256 | 35,363.00 | 37,343.00 | -24,107.00 |
| 300 | 19854 | 2970 | 16884 | 35,363.00 | 38,333.
00 |
-18,479.00 |
| 400 | 26472 | 3960 | 22512 | 35,363.00 | 39,323.00 | -12,851.
00 |
| 500 | 33090 | 4950 | 28140 | 35,363.00 | 40,313.00 | -7,223.00 |
| 600 | 39708 | 5940 | 33768 | 35,363.00 | 41,303.00 | -1,595.00 |
| 628.
34 |
41583.541 | 6220.566 | 35363 | 35,363.00 | 41,583.
57 |
0.0 |
| 700 | 46326 | 6930 | 39396 | 35,363.00 | 42,293.00 | 4,033.00 |
| 800 | 52944 | 7920 | 45024 | 35,363.
00 |
43,283.00 | 9,661.00 |
| 900 | 59562 | 8910 | 50652 | 35,363.00 | 44,273.00 | 15,289.00 |
| 1000 | 66180 | 9900 | 56280 | 35,363.
00 |
45,263.00 | 20,917.00 |
Figure 4. Tabulation of Gross saless Revenue, Variable Cost, Contribution Margin, Fixed Cost, Total Cost and Net IncomeCurrent Assetss
