Page 20 - F5 Slides 2017-18
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3. CVP (breakeven)
Profit = (Contribution per unit x units) - Fixed Costs
Contribution = Sales Value – All Variable Costs
A product has a sales price of £20 and a variable cost of £10 per unit
Units 0 100 500 1000 1500
Contribution(£) 0 1000 5000 10000 15000
Fixed Costs(£) (10000) (10000) (10000) (10000) (10000)
Profit(£) (10000) (9000) (5000) 0 5000
Contribution per unit 10 10 10 10
Profit per unit 0 (90) (10) 50
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