Calculating Break-Even
You have another brilliant idea that you want to propose to your boss. You want to sell t-shirts on the company intranet site to employees to make more money. The t-shirts can be purchased by employees for themselves, family members, suppliers, or customers. You have found a vendor that can supply you the t-shirts, with the company logo for $5.00 per t-shirt.
Working with the attached Excel spreadsheet, you are to determine the number of units you need to sell, and the dollar value required to break even with this new venture. All the data, as well as a template, are provided to you.
Excel Spreadsheet: M9 – Break Even and Contribution Margin.xlsx Download M9 – Break Even and Contribution Margin.xlsx
Once you have calculated the break-even and contribution margin, you are to submit a memo to your boss and include the following:
Introduction
Should include the proposal you are introducing to your boss.
Break-Even Analysis
Why is break-even analysis used?
How many units do you need to sell to break even?
Define the term contribution margin.
What is the contribution margin to the company for each t-shirt that is sold?
How much revenue do you need to break even?
Conclusion
Overall, would you recommend this new venture to your boss? If so, why? If not, why? Based on the results, do you think your boss would approve this new venture?
The memo can be 1 – 2 pages (or more if you feel the need)
Memo Template: Memo Template.docx
SUBMIT
M9- Break-Even and Contribution Margin Excel File
Memo – Written Paper
