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Pro Forma income statement and determine break even point

Using Excel, create a three year Pro Forma income statement and determine break even point on the data attached.

Based on the organization you have created
a. Using Excel, create a three year Pro Forma income statement for your organization (or product/service).
b. What will be your financial break-even point?

Expected sales revenue . . $2,000,000
Manufacturing costs:
Variable cost of goods sold . 325,000
Fixed overhead . . . . . . . .300,000
Selling expenses:
Variable expenses . . . . . . 140,000
Fixed expenses . . . . . . . . 45,000
Administrative expenses:
Variable expenses . . . . . . .45,000
Fixed expenses . . . . . . . .160,000
Other:
Interest expense . . . . . . . 28,000
Income tax rate . . . . . . . . . 35%

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Solution Summary

Your tutorial (in excel, attached) assumes that sales volume increases 10% in year 2 and year 3 (although you can alter this assumption by changing the blue cell and all the computations will update). Breakeven is shown for you.

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