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Break-Even Point Calculation and Chart Creation in Accounting and Finance, Schemes and Mind Maps of Accounting

Instructions for calculating the break-even point in units and dollars for a business using given fixed and variable costs and product price. It also includes directions for creating a break-even chart using excel.

Typology: Schemes and Mind Maps

2021/2022

Uploaded on 09/12/2022

myas
myas 🇬🇧

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Accounting)&)Finance:)Task)3)
) ) Activity)Sheet:)Break9Even)Point)
)
Name:)_________________________________________)
!
Activity)Sheet:)Break9Even)Point))
Departments:))All)
)
Part)1)– )Calculate)the)break9even)point)in)number)of)units)sold.)
Directions:)
1. Recall)the)fixed)costs)and)variable)costs)for)the)business)that)were)identified)in)lesson)2.)
2. Identify)the)price)of)the)product)or)service)you)are)selling.)
3. Use)the)formula)to)calculate)the)break9even)point)in)number)of)units.)
)
Fixed)Costs)=)_____________)Variable)Costs)=)________________)Price)=)_____________)
(Cost)Per)Unit))
)
𝐵𝐸𝑃 =
𝐹𝑖𝑥𝑒𝑑!𝐶𝑜𝑠𝑡𝑠
𝑃𝑟𝑖𝑐𝑒 𝑉𝑎𝑟𝑖𝑎𝑏𝑙𝑒!𝐶𝑜𝑠𝑡)
)
)
Break)Even)Point)=)___________)units)
)
)
)
)
Part)2)– )Calculate)the)break9even)point)in)dollars.)
Directions:)
1. Use)the)fixed)costs,)variable)costs,)and)price)that)were)identified)in)Part)1.)
2. Use)the)formula)to)calculate)the)break9even)point)in)dollars.)
)
Fixed)Costs)=)_____________)Variable)Costs)=)________________)Price)=)_____________)
(Cost)Per)Unit))
)
𝐵𝐸𝑃 =
𝐹𝑖𝑥𝑒𝑑!𝐶𝑜𝑠𝑡𝑠
(1𝑉𝑎𝑟𝑖𝑎𝑏𝑙𝑒!𝐶𝑜𝑠𝑡
𝑃𝑟𝑖𝑐𝑒 )
)
)
)
)
Break)Even)Point)=)$______________)dollars)
)
)
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Activity Sheet: Break-­‐Even Point Name: _________________________________________

Activity Sheet: Break-­‐Even Point

Departments: All Part 1 – Calculate the break-­‐even point in number of units sold. Directions:

  1. Recall the fixed costs and variable costs for the business that were identified in lesson 2.
  2. Identify the price of the product or service you are selling.
  3. Use the formula to calculate the break-­‐even point in number of units. Fixed Costs = _____________ Variable Costs = ________________ Price = _____________ (Cost Per Unit) 𝐵𝐸𝑃 =

Break Even Point = ___________ units Part 2 – Calculate the break-­‐even point in dollars. Directions:

  1. Use the fixed costs, variable costs, and price that were identified in Part 1.
  2. Use the formula to calculate the break-­‐even point in dollars. Fixed Costs = _____________ Variable Costs = ________________ Price = _____________ (Cost Per Unit) 𝐵𝐸𝑃 =

Break Even Point = $______________ dollars

Activity Sheet: Break-­‐Even Point Name: _________________________________________ Part 3 – Create a break-­‐even chart using Excel. Directions:

  1. Open the Excel workbook, financialplanning.yourname, which was saved in the previous lesson.
  2. Select the Break-­‐Even Analysis tab.
  3. Enter your company’s name on Row 1.
  4. Enter the necessary information in the yellow cells as shown below. Insert the fixed and variable expenses here Enter the Price of the product or service here The formulas in cells B10 and B11 will calculate the breakeven point in Units and Dollars. Check that these results match your work in Parts 1 & 2 of this Activity Sheet.