Guillermo Breakeven

Guillermo Furniture Break Even Point Based On Current Budget Team B ACC 561-June 13, 2010

Mid Grade High Grade Total

Sales $ 1,315,765 $ 454,443 $ 1,770,208

Variable cost

Direct Materials $ 361,900 $ 129,250 $ 491,150

Direct Labor $ 775,500 $ 232,650 $ 1,008,150

Benefits $ 77,550 $ 23,265 $ 100,815

Contribution Margin $ 100,815 $ 69,278 $ 170,093

Fixed cost

Salaried $ 50,000

Benefits $ 5,000

Utiliities $ 9,000

Insurance $ 3,000

Property tax $ 975

Depreciaton $ 50,000

Supplies $ 6,000

Total fixed cost $ 123,975

Net income before tax $ 46,118

Contribution Margin Ratio 0.076621 0.152446 0.096086

Beak even point = fixed cost / Contribution Margin Ratio

$123,975/0.096086

$ 1,290,250.40

Break Even Point of each Product In Dollars $ In Units

Mid grade $1,315,765/$1,770,208 *$1,290,250 = $ 959,020.52 1884

High end $454,443/$1,770,208*$1,29,0250 = $ 331,229.48 377

$ 1,290,250.00