Break Even Analysis Financial Math Worksheet printable pdf download

Break Even Analysis Financial Math Worksheet

Break Even Analysis

Activity 1 - Carl Wright

Carl Wright, a market trader, makes and then sells his surfers neckwear for

£19 each. The Variable Cost of producing each item is £14. This is also the

Marginal Cost.

Carl also has Fixed Costs of £200 a week for his sales pitch at an indoor

market.

Calculate the contribution per unit and the break even point.

Activity 2 - Norfolk Press

Norfolk Press specialises in publishing cookery books. A new book is planned

with a likely selling price of £24 per copy.

The costs associated with the new publication are listed below:

Fixed costs (office overheads)

£90,000

Variable cost per book:

Direct Materials

£5.50

Direct Labour

£0.50

Royalties

£1.50

Variable Overheads – Postage

Package & Distribution

£1.50

a) Calculate the Contribution that each book makes

b) Calculate the number of books that Norfolk Press needs to sell in order to

Break-even

c) Calculate the total contribution if Norfolk Press sells exactly its Break-

even figure

d) If Norfolk Press, need to reprint the book, the Variable Costs would remain

the same. However, the Fixed Costs would fall to £60,000. If the selling

price stayed the same, how many of the reprint books must be sold to

Break Even?

Break Even Analysis Financial Math Worksheet