Question

How do you plot a breakeven chart?

I am a little uncertain how to plot break even charts and was wondering if anybody could help.

Say for example:
Selling Price per unit: £51
Variable cost per unit: £21
Therefore contribution: £30

Fixed costs: £170,000 per year OR £14,166.66 per month (I would rather do monthly)
Break even= £14,166.66/£30= 472.2 Units Rounded up to 473 Units

I know to plot the break even chart the £14,166 will stay at the same point. But the part I am stuck on is how do I work out Total Sales and Total Costs and also where do i plot them on the break even chart, like where do i match the Costs with the units? And how steep to draw the line?

Whoever can help I will be really greatful
Thankyou

4 years ago - 1 answers

Best Answer

Chosen by Asker

It can be done in 2 ways


Vertical Axis = Pounds = Y

Horizontal Axis = Units = X

Curve 1: Contribution margin (price - unit variable cost times) X...plot

Curve 2: Horizontal line = Fixed Cost amount where Y = the Fixed Cost

Where the 2 curves meet is break-even

OR

Vertical Access = Profit (Loss)

1 curve (price - unit variable cost - fixed cost) times X

Where curve crosses X axis, profit is 0, loss is 0, break even

Draw the line using a range that would put the break even point close to the middle of the graph

4 years ago