Break Even Analysis

Monthly Expenses for Proposed Delivery Service

Computed using estimated average monthly expenses:

Fixed Cost $ Variable Cost % of revenue/sales
Automobile Insurance 333 Wages/Salary 17.5
Rent 600 Payroll Taxes 2.11
Telephone Bill 260 Workman's Compensation .79
Electricity Bill 120 General Liability Insurance .44
Office Supplies 115 Credit Card Expense .88
Advertising 1,131 Cost of Goods Sold 66
Radio Expense 200

Total

 2,759 87.72

Break Even Point:    0 = Revenue - Fixed Cost - Variable Cost

                                    0 = x - 2,759 - .8772x

                                    2,759 = x ( 1- .8772 )

                                    2,759 = x ( .1228 )

                                    x = 2,759/.1228

                                    x = 22,467

Break Even Point = $ 22,467 in sales