Essay About Guillermo Furniture Break And High Grade

Guillermo Breakeven
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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
$ 1,290,250.00