Break Even Analysis Financial Math Worksheet Page 9
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10Activity 13 – Batman & Robin
Product
Batman
Robin
Budgeted sales and production
500,000
750,000
Machine hours required
1,000,000
3,750,000
Sales revenue (£)
5,000,000
9,000,000
Direct materials (£)
1,000,000
2,250,000
Direct labour (£)
1,250,000
2,625,000
Variable overheads (£)
1,500,000
1,500,000
Fixed costs (£)
1,000,000
2,450,000
The latest sales forecast is that 480,000 units of Product Batman and 910.000 units of
Product Robin will be sold during the year.
Complete the table below to calculate the following:
i.
Budgeted breakeven sales, in units, for each of the two products
ii.
The margin of safety (in units) for each of the two products
iii.
The margin of safety as a percentage (to two decimal places)
iv.
If only Robin were made how many would be needed to make a profit of £280,000
(assume fixed costs are product specific)
Product
Batman
Robin
Fixed costs (£)
Unit contribution (£)
Breakeven sales (units)
Forecast sales (units)
Margin of safety (units)
Margin of safety (%)
Target profit (units)
Activity 14 - Using the PV ratio, what is the sales revenue required to breakeven?
Contribution per unit
£25
Selling price per unit
£32
Fixed costs
£1100
9
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