Economics analysis for

managers

DIGITAL ASSIGNMENT – 1

JK LAKSHMI CEMENT

NAME:- JANANI.S
REG. NO :- 18MBA0011
 JK lakshmi CEMENT
Break-Even Point Analysis:-
The break-even point (BEP) or break-even level represents the sales amount—in either unit
(quantity) or revenue (sales) terms—that is required to cover total costs, consisting of both
fixed and variable costs to the company. Total profit at the break-even point is zero Variable
costs are costs that change with changes in production levels or sales. Examples include: Costs
of materials used in the production of the goods.

Fixed cost 2017 2015 2014 Average

Depreciation 172.37 111.9 135.17 139.8133333

Interest 188.65 90.74 77.19 118.86
Employee cost 208.39 146.11 122.95 159.15
Total Fixed Cost 569.41 348.75 335.31 417.8233333

Varible cost 2017 2015 2014 Average

Raw materials 836.67 691.71 615.46 714.6133333

Miscellaneous expenses 834.98 667.53 591.52 698.01
Taxes -7.8 16.17 22.37 10.24666667
Power and fuel cost 566.95 494.76 422.02 494.5766667
Total variable cost 2,230.80 1,870.17 1,651.37 1,917.45

Net Sales 2,910.41 2,307.06 2,056.60 2,424.69

TC=TFC+TVC 2,800.21 2,218.92 1,986.68 2,335.27

Contribution =Sales-Tvc 679.61 436.89 405.23 507.24

 Profit=Contribution-TFC 110.20 88.14 69.92 89.42

Pv Ratio=Contribution/Sales 0.23351006 0.18937089 0.1970388 0.21

Bep(in amt)=TFC/Pv Ratio 2438.48171 1841.62415 1701.74604 1,993.95

Margin of SafetySsales-Bep(in
amt) 471.93 465.44 354.85 430.74

TFC TC SALES
2014 335.31 1986.68 2056.6
2015 348.75 2218.92 2307.06
2016 552.15 2600.65 2619.85
2017 569.41 2800.21 2910.41

3500

3000

2500

2000 TFC
TC
1500
SALES
1000

500

0
2014 2015 2016 2017

So, the company reached its break even point in the year 2016 with a value of 2619.85. The left part of
the break even point means, the company suffered loss until then and it started receiving profits after
the break even point.