Break Even Analysis Financial Math Worksheet Page 3
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1
2
3
4
5
6
7
8
9
10d. Complete the following table to calculate profit/(loss) at different
production levels (table method):
Units of
Fixed
Variable
Total
Sales
Profit /
output
Costs
costs
Costs
Revenue
(loss)
1000
2000
4000
6000
8000
Activity 4 - Margin of Safety
Using the information for activity 1 . . . .
a) If Carl produced 70 units his margin of safety would be:
b) If Carl produces 55 units his margin of safety would be:
c) If 60 units were produced by Carl his margin of safety expressed as a
percentage would be:
d) At an output of 70 units Carl’s percentage margin of safety would be:
Activity 5 - Ian Taylor
In January 2014 Ian Taylor began a small business supplying 5-a-side football
sets. The sets consist of a football and two goals with nets. Ian advertises
them in football magazines and sells them by mail order. The components are
bought direct from manufacturers for a total of £25 per set. Fixed Costs are
£20,000 per year, with advertising making up more than half of these costs.
Ian sells the sets for £75 each and, in the first year, he sold 300. In the
next year Ian doubled sales to 600 sets.
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