Create a break even analysis chart in Excel by Chris Menard

Posted on:  05/31/2017 Create a break even analysis chart in Excel by Chris Menard

To find the break-even, you need to take your variable expenses and subtract them from your revenue or sales. This is knows as the Contribution Margin. Variable expenses are:

  1. Direct material
  2. Commission per unit
  3. Hourly production wages
  4. Shipping cost
  5. Packaging

Variable expenses are those expenses that are directly related to volume. The more you produce the higher your variable cost.

Next, we are going to take our fixed expenses, and divide by the Contribution Margin per unit. Fixed expenses do not fluctuate. They include such expenses:

  1. rent
  2. insurance
  3. Security
  4. dues and subscriptions
  5. equipment leases
  6. payments on loans
  7. depreciation
  8. management salaries
  9. advertising

Dividing your fixed expenses by the Contribution margin per unit will give you the break-even in units. Anything above that number is profit and below that number will be a loss.

YouTube Video of creating a break-even analysis chart

Chris Menard

Chris Menard is a Microsoft Certified Trainer (MCT) and Microsoft Most Valuable Professional (MVP). Chris works as a Senior Trainer at BakerHostetler - one of the largest law firms in the US. Chris runs a YouTube channel featuring over 900 technology videos that cover various apps, including Excel, Word, PowerPoint, Zoom, Teams, Coilot, and Outlook. To date, the channel has had over 25 million views. Menard also participates in 2 to 3 public speaking events annually, presenting at the Administrative Professional Conference (APC), the EA Ignite Conference, the University of Georgia, and CPA conferences. You can connect with him on LinkedIn at https://chrismenardtraining.com/linkedin or watch his videos on YouTube at https://chrismenardtraining.com/youtube.

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