User Inputs:

4,000,000 $70,000,000 $90.00 23% $28.00 $40.00Capacity Fixed Costs Unit Price Share Gain Costs Mat'l/Unit Conv/Unit

Table of Unit Sales, Gross Revenue, Costs, and Profit

Break-Even Visualizer -- Template with provision to portray discount and "crash-cost" effects

w w w . c o r t r a p a r . c o m Copyright 2002 Corporate Training Partners, Inc. traininginc@cortrapar.com

NOTES: No standardization exists in what costs organizations include in material and activity costs.This template depends entirely on the judgment of the user in properly reflecting costs.Many discount and excess-capacity costs increase on a non-linear (exponential) basis. In those cases, this template will tend to underestimate the effects of aggressive discounting and over-capacity activity.This template only applies discounts to units sold above capacity; if ALL units go down in price as part of a discount, the impact is MUCH larger.Instructions: Enter the data in the green user-data boxes as labeled. The template creates a graph and data table of outcomes.ATTENTION USER: Put cell A6 in the upper-left corner of your screen, to watch the graph update in real-time!

Units per Year

at 100% ofnormal

short-term capacity (the

capacity already in

place):

Organization's Period

(or "Fixed") Costs

per year:

Sales Price per unit when

sales rateis well within short-term

capacity

Percentage Unit Price discount and/orselling cost increase to result in short-term

market share gainsto exceed short-termcapacity (0% = zero

selling cost increases or discounts required to

gain share)

Material Cost (or "Variable Cost") per

unit produced within normalshort-term capacity :

Labor and Activity Cost (or "Variable Cost") per

unit produced within normalshort-term capacity :

0

400,

000

800,

000

1,20

0,000

1,60

0,000

2,00

0,000

2,40

0,000

2,80

0,000

3,20

0,000

3,60

0,000

4,00

0,000

4,40

0,000

4,80

0,000

5,20

0,000

5,60

0,000

6,00

0,000

6,40

0,000

6,80

0,000

7,20

0,000

7,60

0,000

$0

$100,000,000

$200,000,000

$300,000,000

$400,000,000

$500,000,000

$600,000,000

$700,000,000

Break Even Visualizer with capability to show discount and "crash-cost" effects

Gross Revenue Less Discounts & Share-Gain Costs

Column D

Total Costs

Units of Production & Sales

0% 0 $0 $70,000,000 $0 $010% 400,000 $36,000,000 $70,000,000 $11,200,000 $16,000,00020% 800,000 $72,000,000 $70,000,000 $22,400,000 $32,000,00030% 1,200,000 $108,000,000 $70,000,000 $33,600,000 $48,000,00040% 1,600,000 $144,000,000 $70,000,000 $44,800,000 $64,000,00050% 2,000,000 $180,000,000 $70,000,000 $56,000,000 $80,000,00060% 2,400,000 $216,000,000 $70,000,000 $67,200,000 $96,000,00070% 2,800,000 $252,000,000 $70,000,000 $78,400,000 $112,000,00080% 3,200,000 $288,000,000 $70,000,000 $89,600,000 $128,000,00090% 3,600,000 $324,000,000 $70,000,000 $100,800,000 $144,000,000

100% 4,000,000 $360,000,000 $70,000,000 $112,000,000 $160,000,000110% 4,400,000 $387,720,000 $70,000,000 $124,768,000 $178,880,000120% 4,800,000 $415,440,000 $70,000,000 $137,536,000 $197,760,000130% 5,200,000 $443,160,000 $70,000,000 $150,304,000 $216,640,000140% 5,600,000 $470,880,000 $70,000,000 $163,072,000 $235,520,000150% 6,000,000 $498,600,000 $70,000,000 $175,840,000 $254,400,000160% 6,400,000 $526,320,000 $70,000,000 $188,608,000 $273,280,000170% 6,800,000 $554,040,000 $70,000,000 $201,376,000 $292,160,000180% 7,200,000 $581,760,000 $70,000,000 $214,144,000 $311,040,000190% 7,600,000 $609,480,000 $70,000,000 $226,912,000 $329,920,000

Percent of Short-Term Capacity

Unit Sales

per Year

Gross Revenue per year less discounts and special costs

Period (or "Fixed")

Costs per year

Material Costs per

Year

Labor & Conversion Costs per

Year

14% 18%Mat'l Crash Cost Conv Crash Cost

Table of Unit Sales, Gross Revenue, Costs, and Profit

Template with provision to portray discount and "crash-cost" effects

traininginc@cortrapar.com

NOTES: No standardization exists in what costs organizations include in material and activity costs.

Many discount and excess-capacity costs increase on a non-linear (exponential) basis. In those cases, this template will tend to underestimate the effects of aggressive discounting and over-capacity activity.This template only applies discounts to units sold above capacity; if ALL units go down in price

ATTENTION USER: Put cell A6 in the upper-left corner of your screen, to watch the graph update in real-time!

PercentageMaterial Cost

increase abovenormal

short-term capacity(0% =

zero cost to exceed capacity)

PercentageLabor & Activity Cost increase above normal

short-term capacity(0% =

zero cost to exceed capacity)

0

400,

000

800,

000

1,20

0,000

1,60

0,000

2,00

0,000

2,40

0,000

2,80

0,000

3,20

0,000

3,60

0,000

4,00

0,000

4,40

0,000

4,80

0,000

5,20

0,000

5,60

0,000

6,00

0,000

6,40

0,000

6,80

0,000

7,20

0,000

7,60

0,000

$0

$100,000,000

$200,000,000

$300,000,000

$400,000,000

$500,000,000

$600,000,000

$700,000,000

Break Even Visualizer with capability to show discount and "crash-cost" effects

Gross Revenue Less Discounts & Share-Gain Costs

Column D

Total Costs

Units of Production & Sales

Profit Per Year$70,000,000 -$70,000,000$97,200,000 -$61,200,000 -170%

$124,400,000 -$52,400,000 -73%$151,600,000 -$43,600,000 -40%$178,800,000 -$34,800,000 -24%$206,000,000 -$26,000,000 -14%$233,200,000 -$17,200,000 -8%$260,400,000 -$8,400,000 -3%$287,600,000 $400,000 0%$314,800,000 $9,200,000 3%$342,000,000 $18,000,000 5%$373,648,000 $14,072,000 4%$405,296,000 $10,144,000 2%$436,944,000 $6,216,000 1%$468,592,000 $2,288,000 0%$500,240,000 -$1,640,000 0%$531,888,000 -$5,568,000 -1%$563,536,000 -$9,496,000 -2%$595,184,000 -$13,424,000 -2%$626,832,000 -$17,352,000 -3%

Total CostsPer Year

Profit as a percentage

of Gross Sales