Question

I got the first 4 steps done. Just need to know what formulas from the data

Step #1 ASSUMPTIONS Launch-it S10.00 Product #1: Sales price per unit Variable costs per unit: 1.00 2.00 1.00 4.00 Purchase Price Shipping and HandlingS Sales Comission Total variable cost per unit 200 Monthly volume Treat-Time $30.00 Product #2: Sales price per unit Variable costs per unit: 7.00 8.00 3.00 18.00 Purchase Price Shipping and Handling Sales Comission 9 Total variable cost per unit 20 21Monthly volume 100 Fixed costs per month $ 1,000.00 S500.00 S1,500.00 Work Contract 24 25 26 27 28 29 Trade-Show Entry Fees Total fixed costs per month S900.00 Target profit per month Expected change in volume (%) 5% Start

to use for steps 5,6, and 7.

Answer 1

as you said you are done till step 4

so continuing from Step 5 and only the formulas so.

Breakeven: Fixed cost divide by sale price of per unit. which gives sales qty breakeven than we can calculate the breakeven of sales in amount.

Margin of safety is sales above the break even point.

TArget point is the actual target kept for the year.

Given an example :

Total break even    margin of safety

Sales    100

Less variable cost    40

Contribution 60

Less fixed cost (per unit) 20    0#

Profit    40    0*

* because at break even there is no profit.

# Because at margin of safety level, Fixed cost is always zero.

so with this concept you can find out all the percentage also, Take total sales to 100 and then find out the other Break even sales percentage and margin of safety percentage.

Toatal sales = Break even sales + Margin of safety sales.