Formulas for Oak Desk Clocks, Inc Break-Even Point Analysis:
The really cool thing about Excel is the fact that there are numerous ways to perform any calculation. Just because the formulas shown below is the way I did this exercise does not mean that this is the only right way to figure the break-even point.
I show the formulas for Years 2006 and 2007 - the formulas for Years 2008 and 2009 are done the exact same way - just substitute the correct alpha column. For example, cell D18 would read =+C18+C18*$D$6.
$ signs in a formula indicate this is an absolute reference that remains the same no matter where in the workbook you copy this cell address. For an absolute reference the $ sign must be before both the column and row number as shown in the paragraph above.
As you work your way through this break-even point analysis reference the info contained in Column D, Rows 6 through 9 (alternatively, go back to page 1) to review this information:
Anticipated Changes Per Year:
Selling Price per unit 10%
Cost of Good Sold 5%
Fixed Costs 0%
Advertising -12%
Suppose you are the business owner and you would also like to see how many oak desk clocks you would have to sell in order to be able to pay yourself $100,000 per year.
Now that we have a basic workbook setup this extra calculation can be accomplished quickly and easily - ( go to page 4) to check out the steps.
