# Boeing-Breakeven Analysis

Satisfactory Essays
322 Words
Grammar
Plagiarism
Writing
Score
Boeing-Breakeven Analysis
Boeing Co.-Breakeven Analysis

The Boeing 737-900ER was released in July 2005 and made its first delivery to Indonesia's Lion Air in 2007. The price of the 737-900ER ranges from \$74,000,000-\$89,000,000 per plane. The purpose of this assignment is to apply breakeven analysis to a project within Boeing using data obtained from the company’s website as well as fabricated information used to apply the tool. The fictitious information was used only because Boeing didn’t provide a breakdown of costs per program. Let’s assume that Boeing's annual fixed cost for the 737-900ER are \$980 million, and its variable cost per airplane is \$65 million. In order to calculate the break even point, the contribution margin for each plane must first be calculated as follows (Note: Assuming the price of the plane is \$89,000,000):
1. Sales price - Variable cost per plane: 89-65=24 million
Next, since the total fixed cost is given, the break even point can be calculated.
2. Break even point= 980/24= 40.83 planes
Thus, Boeing needs to sell approximately 41 airplanes in order to achieve their break even point.

Module 2: Session Long Project Page 3

In terms of sales dollars, the figure will be: 40.83 x 89 million= 3634.17 million or 3.634 billion dollars. In conclusion, the 737-900ER’s overall break even point was low, indicating that the overall operations of the project are within a reasonable scope and there’s no huge threat of potential difficulties within the company, unless the break even point reaches their sales volume, which could cause a problem if they become limited on resources. Break even point analysis is a great tool transmit helpful information to companies, but its inability to illustrate how profit changes as activity changes within the organization calls for other methods to assist in the overall

## You May Also Find These Documents Helpful

• Satisfactory Essays

A breakeven analysis is used to determine how much sales your business needs to start making a profit. Every business wants and needs to make a profit but the only way you can determine if your product or service is profitable is by conducting a break-even analysis. This is a tool used by companies to understand how many products they have to sell in order for the company to break even. However, for you to understand how to come up with the breakeven analysis, you first need to understand the process of the pricing methods that contribute to the break-even point.…

• 332 Words
• 2 Pages
Satisfactory Essays
• Satisfactory Essays

. 2 points =175 Question 10 .   If the price increases but fixed and variable costs do not change, the break even point   Answer…

• 741 Words
• 3 Pages
Satisfactory Essays
• Better Essays

Break-even analysis helps to plan and control business by showing break-even point, net profit and net loss areas. As it is mentioned in the graph below, on the break-even point cost is equal to revenue which means there is neither loss nor profit at the intersection of sales line and cost line (Frongello).…

• 1240 Words
• 5 Pages
Better Essays
• Powerful Essays

The Boeing Company Financial Analysis 2007-2011 Group 1 Financial Statement Analysis, FIN 506, Winter 2013…

• 9354 Words
• 38 Pages
Powerful Essays
• Good Essays

Break-even point is the point at which total revenue equals total costs or expenses. At this point, there isn’t any profit or loss, it’s the break-even. A business could be turning a large amount of money, but still be making a loss. Knowing the break-even point is helpful in deciding prices, setting sales and preparing a business plan. The break-even point is a useful implement to decide on the organisation’s sales volume, average production costs aswell as sales prices.…

• 1106 Words
• 3 Pages
Good Essays
• Good Essays

University of Phoenix (2010). Break Even Analysis. Retrieved November 22, 2010, from University of Phoenix ACC561 website.…

• 758 Words
• 4 Pages
Good Essays
• Satisfactory Essays

Question 3 Break even point without sales commissions 2003 average sales tickets variable cost fixed cost sales tickets to break even 1607 725 2954 3349 2004 1524 768 2990 3955 without sales 2006 commissions 1553 814 3893 5267 1398 514 3357 3797…

• 448 Words
• 2 Pages
Satisfactory Essays
• Good Essays

c) Break-even point –This is fixed costs divided by unit contribution (the unit contribution is the selling price minus the variable cost per unit). This shows how many products a business needs to produce or sell, along with what services need to be offered, to display the point where they’re neither making a profit or loss. Total revenue equals total cost.…

• 3316 Words
• 17 Pages
Good Essays
• Satisfactory Essays

725 units Break Even Point = Price per Unit x Break Even in Units 725 units x \$1= \$725…

• 790 Words
• 4 Pages
Satisfactory Essays
• Good Essays

* Break-even analysis is based on a static model - in business conditions change daily both internal and external…

• 1050 Words
• 4 Pages
Good Essays
• Good Essays

In order to calculate the breakeven point, we use the following equation and budget data:…

• 1117 Words
• 5 Pages
Good Essays
• Satisfactory Essays

a. What is the break-even point in bags? 80,000/5= 16,000 bags- This is the company's break-even point because the variable per unit would be \$5.00 if it's .10 per pound with a 50-lb bag. The other answer I received was 8,080 bags but this would be inaccurate.…

• 355 Words
• 2 Pages
Satisfactory Essays
• Powerful Essays

Based on the Harvard Business school breakeven analysis tool, I was able to realize that in order for Waltham Motors to make profit, they will have to produce more than 13,325 units. From a revenue perspective, they will have to generate sales of more than \$639,672 in revenue. The line graph below illustrates how Waltham Motors breakeven analysis. Where the revenue meets total costs (fixed + variable) shows the point at which they will break even, based on the performance report information provided to us in the case.…

• 2718 Words
• 11 Pages
Powerful Essays
• Good Essays

Direct materials Depreciation Lease charge Property taxes 3. At the break-even point of 2,500 units, variable costs are \$55,000, and fixed costs are \$32,000. How much is the selling price per unit? (Points : 2)…

• 561 Words
• 3 Pages
Good Essays