Вы находитесь на странице: 1из 18

HBS Toolkit

HBS Toolkit License Agreement


Harvard Business School Publishing (the Publisher) grants you, the
individual user, limited license to use this product. By accepting and
using this product, you agree to the terms of service described below.
Terms
You accept that this product is intended for your use, and you will not
duplicate in any form or manner, electronic or otherwise, copies of this
product nor distribute this product to anyone else.
You recognize that the product and its content are the sole property of the
Publisher, and that we have copyrighted the product.
You agree that the Publisher is not responsible for any interruption of
service or malfunction that is a consequence of the Internet, a service
provider, personal computer, browser or other software or hardware
components. You accept that there is no guarantee that this product is
totally error free. You further understand and accept that the Publisher
intends to provide reliable information but does not guarantee the accuracy
or completeness of any information, and is not responsible for any results
obtained from the use of such information.
This license is effective until terminated, when the license or subscription
period ends without renewal, or when you destroy this product and any
related documentation. The Publisher may terminate your license without
notice if you fail to comply with the conditions set forth in this
agreement, and may pursue any other legal recourse.

Copyright 1999 President and Fellows of Harvard College

LICENSE AGREEMENT

Break-Even Analysis

Contents
Introduction:
Analysis:
Chart:
Table:

INTRODUCTION

This sheet
Entry screen for fixed and variable costs, pricing/contribution,
and volume information
Displays break-even point, variable costs, fixed costs,
and contribution in dollars and units
Output data which generates break-even chart

Overview
Managers often want to know the production level where profits earned from a product cover
the cost of resources used to create it. Break-even analysis is how we determine this level.
The point at which total sales revenues covers the costs of committed resources is called the
break-even point. In addition to knowing the break-even point, managers may also want to
know the point at which sales volume reaches a pre-set target-profit level.
This tool helps you perform both of these calculations. The first is break-even analysis
where your goal is to determine how many units you must sell to recover all of your fixed
costs. The second is target-profit analysis where your goal is to determine how many
units you must sell to reach a pre-defined profit level. The difference between the two is
that at break-even your target-profit is zero, whereas when you specify a target-profit
that is greater than zero, you are setting your goal above the break-even point.

Directions
You may want to print these directions as a reference guide for this tool.
These directions provide a general introduction to the contents of each worksheet
in the tool. For more detailed directions place your mouse above the red celltips
located throughout the tool. See this example -->
Analysis:

The analysis page is your primary input sheet. Here you will
tell the tool what type of analysis you want to perform, input
the data required to perform calculations, and view some of
the output of those calculations.

Chart:

The chart sheet is one of the two report sheets in this tool.
Here you can visually measure your break-even or target-profit
level along with total fixed and variable costs. If you chose to
calculate the number of months before you reach break-even
or target-profit those numbers will be reported here.

Table:

The table sheet is the second output report and contains the
data used to generate the break-even/target-profit chart. This
includes ten data points on either side of the break-even/target-profit
point.

Important Note: This tool is based on a Microsoft Excel worksheet. Any changes
you make to this file are permanent once you save the file. To
re-use this tool as a template for break-even calculations, always
open a new copy of the tool and save your results with a
different file name.
To start using the tool, remove the sample data from the tool using the Show/Hide
Sample Data option under the HBS Menu

Break-Even Analysis

INTRODUCTION

Sample Problem
A company wants to begin selling a new pair of hand-held pliers in the upcoming fiscal
year. They want to know how many hand-held pliers they will have to sell in order to
break-even on this investment in materials and equipment. They received the following
data from the chief financial officer:

Fixed costs
Metal molding machine:
Plastic grip molder:
Sander:
Variable costs (per unit)
Packaging material:
Raw material
Grip material:
Shipping

$100,000
$25,000
$5,000

$1.00
$1.00
$0.50
$0.50

The marketing department estimates that they can sell their new pliers for
$15.00 per unit. They further project that they will average 1200 units
per month.
The goal is that they will break-even and start to earn a profit within
the first year. His target-profit level for the end of the first fiscal year is
$100,000.

Note About Using Internet Explorer


The default setting in Internet Explorer is to open these tools in the Explorer application
insteadof Excel. We recommend against this and provide directions in the Help section of
the HBSToolkit web site to change this default behavior.

HBS Menu
Show/Hide Sample Data:
Show Calculator:
Show/Hide Celltips:
Print Sheet with Celltips:
Set Zoom:
Visit Web Links:
About HBS Toolkit:

Displays or removes sample entries


Launches Windows calculator
Toggles in/out red Celltips in documented cells
Prints Celltip documentation on current sheet
Provides quick access to 80%, 100%, and 125% zoom levels
Links to HBS Toolkit website, Toolkit Glossary, and Toolkit
Feedback, as well as HBS and HBS Publishing web sites
Launches the about box for the HBS Toolkit

Jon B. DeFriese MBA `00 and Chad Ellis, MBA `98 developed this software under the
supervisionof Professor Steven Wheelwright as the basis for class discussion rather than
to illustrate eitherthe effective or ineffective handling of an administrative situation.
Copyright 1999 President and Fellows of Harvard College

Break-Even Analysis

Solve for:

Number Units

ANALYSIS

Product Name:

Break-Even Point

$0.00

Target Profit

Fixed Costs
Item 1
Item 2
Item 3
Item 4
Item 5
Item 6
Item 7
Item 8
Fixed Costs:

Variable Costs per Unit


$100,000.00
$25,000.00
$5,000.00

$130,000.00

Pricing and Contribution

Item 1
Item 2
Item 3
Item 4
Item 5
Item 6
Item 7
Item 8
Var. Costs/Unit:

$1.00
$1.00
$0.50
$0.50

$3.00

Volume

Unit Price:

$15.00

Break-Even Volume:

10,833

Unit Contribution Margin:

$12.00

Expected Sales Per Month:

1,200

Sales per month expressed in:

Units

Notes:

Copyright 1999 President and Fellows of Harvard College

Dollars

sample1

100000
25000
5000

15

Page 5

sample1

Page 6

sample1

1
1
0.5
0.5

1200

Page 7

sample1

Page 8

sample1

Page 9

sample1

Page 10

current1

Page 11

current1

Page 12

current1

Page 13

current1

Page 14

current1

Page 15

current1

Page 16

Break-Even Analysis

BREAK-EVEN
CHART

$350,000
$300,000
$250,000

Dollars

$200,000
$150,000
$100,000
$50,000
$0

Number of Units
Total Variable Costs
Total Fixed Costs

Units Required for Break-Even:


Dollar Sales Required for Break-Even:
Variable Costs Per Unit:
Total Variable Costs:
Total Fixed Costs:
Months to Break-Even:

10,833
$162,500.00
$3.00
$32,499.00
$130,000.00
9.0

Copyright 1999 President and Fellows of Harvard College

Total Sales Revenues

Break-Even Analysis

BREAK-EVEN
TABLE

Number of Units

Total Fixed Costs

Total Variable Costs

Total Sales Revenues

0
1083
2167
3250
4333
5417
6500
7583
8666
9750
10833
11916
13000
14083
15166
16250
17333
18416
19499
20583
21666

$130,000
$130,000
$130,000
$130,000
$130,000
$130,000
$130,000
$130,000
$130,000
$130,000
$130,000
$130,000
$130,000
$130,000
$130,000
$130,000
$130,000
$130,000
$130,000
$130,000
$130,000

$0
$3,250
$6,500
$9,750
$13,000
$16,250
$19,499
$22,749
$25,999
$29,249
$32,499
$35,749
$38,999
$42,249
$45,499
$48,749
$51,998
$55,248
$58,498
$61,748
$64,998

$0
$16,250
$32,499
$48,749
$64,998
$81,248
$97,497
$113,747
$129,996
$146,246
$162,495
$178,745
$194,994
$211,244
$227,493
$243,743
$259,992
$276,242
$292,491
$308,741
$324,990

Copyright 1999 President and Fellows of Harvard College

Вам также может понравиться