Break Even Analysis Financial Math Worksheet Page 7
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10Activity 8 - Happy Days
Happy Days make and sell the Rio, which has a variable cost of £90 per unit and which sells
for £120 per unit. Budgeted Fixed Costs are £210,000 and budgeted Sales are 9,000 units.
Calculate the break-even point – both in units and sales value (revenues) If Happy Days
wanted to make a target profit of £62,000 how many Rios would they need to produce &
sell?
Activity 9 - Widget
A business makes a ‘Widget’. Variable Costs are £25 per unit, the Selling Price per unit is
£50 and, Fixed Costs of £1,000 are incurred each week.
a) How many Widgets would need to be produced to break-even?
b) Currently you produce Hidgits and make a profit of £1,000 per week. If you decide to
produce Widgits as an alternative, you will need to at least match this level of profit –
how many units will you have to produce?
c) How many do you need to produce if you require Profit to be £1,500 per week?
d) What will be the margin of safety if you sell 60, then 80 units?
Activity 10 - Mild Ltd
The following information relates to one period for Product D, which is manufactured by Mild
Ltd.
Expected Sales Revenue £160,000
Selling Price per unit
£16
Variable Costs
£8 per unit
Fixed Costs
£40,000
a) What is the break-even point in units and sales revenue?
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