# South AfricaBreakeven Sales

#### Flupsie1

I have tried to compute the Breakeven sales for a workshop, but my answer appears to be incorrect. I have used Goal Seek in Excel and get a higher breakeven sales. I have use fixed costs/the contribution margin, to compute my breakeven sales It would be appreciated if someone would kindly assist me so I can see where I have gone wrong. I have attached sample data

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#### kirby

VIP Member
The rule is NEVER open a zipfile from an unknown source, such as this.

#### Flupsie1

Hi Kirby

When I attached the file, the file types were zip. txt, pdf etc so I was under the impression the .zip file was acceptable. At least I know for future posting not to upload zip files

I have copied a link to drop box

Regards

Howard

#### kirby

VIP Member
Kaspersky in a May 2019 online article lists .zip, .xlsx and .pdf as included in the top 4 dangerous file attachments.

#### emilynaughton

I have tried to compute the Breakeven sales for a workshop, but my answer appears to be incorrect. I have used Goal Seek in Excel and get a higher breakeven sales. I have use fixed costs/the contribution margin, to compute my breakeven sales It would be appreciated if someone would kindly assist me so I can see where I have gone wrong. I have attached sample data
The breakeven point is when the operating income is zero for a company. If you need to find your breakeven sales in terms of units, divide fixed expenses by the contribution margin per unit. If you need the breakeven sales in dollar form,divide fixed expenses by the contribution margin ratio.

#### Werner Reisacher

VIP Member
Here is the formula:
Fixed Cost: \$ 200000
variable cost per unit \$ 20
sales price per unit \$ 45
contribution margin per unit \$ 25 (sales - variable cost)

The breakeven point is reached when the profits generated by the sales equals all fixed costs:
Fixed Cost \$ 200000
contribution margin per unit \$ 25
Breakeven point in # of units # 10000 (Fixed Cost / # contribution margin)
sales price per unit \$ 45
Breakeven point in sales \$ 450000

Was there any other question? I am technically too challenged to go into the file security issues.

#### kirby

VIP Member
The above solution is wrong.
Breakeven formula in units is indeed Fixed cost divided by Contribution Margin
so \$200,000 divided by \$25 = 8,000 not 10,000 per above
And that's one of the downsides in not doing your own homework and asking somebody else to figure it out.

#### Werner Reisacher

VIP Member
Simple arithmetic. Thank you Kirby. Always thankful for your eagle eye.