Contribution Margin per Unit
Sales
Price per Unit $1,739 – Variable Costs per Unit $534 = $1,205 Contribution Margin per Unit
Break Even in Units
$83,300
fixed cost / Sales Price per Unit $1,739 – Variable Costs per Unit $534 = $69 Break Even Point in Units
Break Even in Dollars
69
units x $1,739 Sales Price per Unit = $119,991
Break Even in Dollars
Magazine Sales
Since I
have a quarterly magazine and I expect to make $71,300 with each publication. I
would need to sell 41 pages in one publication and once I sell the first 28
pages of the second publication; I am at break even.
Hi Magi,
ReplyDeleteYour contribution margins look very enticing! That is great news seeing as your break even point is definitely attainable. With your market reach selling those 69 units seems like it could early on leaving you ample time to continue to build revenue and more importantly profit.
Margaret,
ReplyDeleteYour numbers for a quarterly magazine are spot on. You also could probably increase your variable costs up just slightly due to the different advertising options that you are making available to clients. Breaking even with this publication should be pretty easy to accomplish. Great analysis!