Let’s assume a company needs to cover $2,400 of fixed expenses each week plus earn $1,200 of profit each week. In essence the company needs to cover the equivalent of $3,600 of fixed expenses each week.
Presently the company has annual sales of $100,000 and its variable expenses amount to $37,500 per year. These two facts result in a contribution margin ratio of 62.5%:
Sales $100,000
Variable Expenses – 37,500
Contribution Margin $ 62,500
Contribution Margin Ratio = Contribution Margin ÷ Sales
Contribution Margin Ratio = $62,500 ÷ $100,000
Contribution Margin Ratio = 62.5%
The amount of sales necessary to give the owner a profit of $1,200 per week is determined by this breakeven point formula:
Breakeven Point in Sales $ per week = Fixed Expenses per week ÷ Contribution Margin Ratio
Breakeven Point in Sales $ per week = $3,600 per week ÷ 62.5%
Breakeven Point in Sales $ per week = $5,760 per week
To verify that this answer is reasonable, we prepared the following schedule:

Per Week 
52 Weeks 
Sales 
$ 5,760 
$ 299,520 
Variable Expenses (37.5%) 
– 2,160 
– 112,320 
Contribution Margin 
3,600 
187,200 
Fixed Expenses 
– 2,400 
– 124,800 
Profit 
$ 1,200 
$ 62,400 
As you can see, for the owner to have a profit of $1,200 per week or $62,400 per year, the company’s annual sales must triple. Presently the annual sales are $100,000 but the sales need to be $299,520 per year in order for the annual profit to be $62,400.
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