Question

I have a given numbers

Revenue: 150,000

price: 300

numbers of services provided 1500 to 500 people.

Fixed cost : 18122

variable cost: 15,000

I want the profit margin and the break-even point, in this case, if the break-even not available which should I change in these numbers to make it in break-even situation because this question is from me . PLEASE i want the draw of break-even situation in excel sheet

Answer 1

As Given Revenu is 150000 and price is 300 , and hence the data is given for service provided to 500 people ie 150000/300= 500, so the variable cost per services will be 15000/500 = 30 per service people

Contribution Margin will be 300-30 = 270

Profit Margin will be, sale less variable cost less fixed cost divided by Net Sales ie (150000-15000-18122) /150000 =77.92%

Break Even Point (Unit ) = Fixed Cost ÷ Contribution margin= 18122/270= 67 people , break even point is that situation where your cost of production/ services equal to the revenue and hence there is no profit no loss , here u can easily breakeven as the cost of service is much lower then revenue