Cost & Management Accounting Break-even Chart Lecture-32 Mian Ahmad Farhan (ACA)

Example Break-even sales (700 x 8) 5,600 Variable cost (700 x 6) 4,200 Contribution margin 1,400 Fixed cost 1,000 Profit 400

Break-even Graph Y Sales Cost & Sales (Rs) Cost Variable cost FC X 8000 7000 6000 5000 4000 3000 2000 1000 Sales Cost & Sales (Rs) Cost Variable cost FC Contribution margin FC X 100 200 300 400 500 600 700 800 Production in units

Profit Volume Graph Y Profit / Loss X Units sold 1000 800 600 400 200 X 200 100 200 300 400 500 600 700 800 400 Units sold 600 800 1000

If 100 units are sold Sales (100 x 8) 800 Less Variable cost (100 x 6) 600 Contribution margin 200 Less Fixed cost 1,000 Loss 800

If 200 units are sold Sales (200 x 8) 1,600 Less Variable cost (200 x 6) 1,200 Contribution margin 400 Less Fixed cost 1,000 Loss 600

If 200 units are sold Sales (200 x 8) 1,600 Less Variable cost (200 x 6) 1,200 Contribution margin 400 Less Fixed cost 1,000 Loss 600

If 600 units are sold Sales (600 x 8) 4,800 Less Variable cost (600 x 6) 3,600 Contribution margin 1,200 Less Fixed cost 1,000 Profit 200

If 800 units are sold Sales (800 x 8) 6,400 Less Variable cost (800 x 6) 4,800 Contribution margin 1,600 Less Fixed cost 1000 Profit 600