Break-Even Analysis of Apple Inc.: Scenarios and Calculations Report

This report presents a break-even analysis for Apple Inc., examining both single and multiple product scenarios. The analysis begins by defining and summarizing the steps and formulas used in break-even calculations. The report then applies these concepts to Apple Inc., creating two distinct scenarios. The first scenario focuses on a single product, the Apple iPod, calculating the break-even point based on fixed costs, selling price, and variable costs. The second scenario considers multiple products, specifically the iPhone 11, iPhone 11 Pro, and iPhone 11 Max. This multiple-product analysis uses weighted averages for selling price and variable expenses to determine the overall break-even point and then allocates the required sales units across each iPhone model based on their respective sales percentages. The report includes detailed calculations, assumptions regarding costs and pricing, and a discussion on how break-even analysis can be used by management to make informed decisions.

Running head: ACCOUNTING
Accounting
Name of the Student:
Name of the University:
Author’s Note:

1ACCOUNTING
Table of Contents
Breakeven Analysis.........................................................................................................................2
Bibliography....................................................................................................................................6

2ACCOUNTING
Breakeven Analysis
The breakeven analysis for the company has been well done for the purpose of well
finding out the minimum number or units that the company needs to well sell for the purpose of
well covering the fixed costs of a company. The breakeven analysis for the Apple Incorporation
has been well carried down in two scenarios in which a single product was considered were
expenses incurred related to a single product has been accounted and relevant analysis has been
well accounted for analysis purpose. In each of the breakeven analysis calculated for the
company there were several assumptions and facts included. The two products upon which the
analysis has been specifically created is the Apple ipod in the first case. On the other hand, in the
second scenario three products which were well selected were Apple iphone 11, Apple iphone 11
Pro, Apple iphone 11 Max.
Single Product Analysis: The formula that has been well applied for calculating the Breakeven
Sales has been as follows:
Breakeven Units: Fixed Costs/(Selling Price-Variable Cost)
The fixed costs that the company would be incurring has been well classified whereby relevant
fixed costs that the company would be incurring has been drawn on a detailed basis and the same
has been well encountered. The selling price for the Ipod has been kept at $199 for the Ipod and
the breakeven units that it needs to well sell for covering its fixed costs has been around 4007
Units. The total fixed costs considered was around $68450. Other key analysis like variable
costs per unit and contribution margin were also shown in a detailed manner.

3ACCOUNTING
Product Name Date :
199.00$
4007.0 Units
797,393$
15,000$
500$
1,200$
250$
500$
2,500$
5,250$
12,000$
25,000$
5,000$
1,250$
-
68,450$
Cost of Goods Sold 100$ per unit
Direct Labor 50$ per unit
Overhead 15$ per unit
Other (specify) per unit
Sum: 165$
Commissions 8.50% per unit
Other (Specify) 0.00% per unit
Sum: 8.50%
181.92$
17.09$
8.59%
4007
797,393$
Apple Inc.
Break-Even Analysis
Variable Costs based Amount per Unit
Advertising
Accounting, Legal
Depreciation
Interest Expense
Insurance
Rent
Supplies
Fixed Costs
Variable Costs
Selling Price (P):
Break-Even Units (X):
Break-Even Sales (S):
Taxes(real estate, etc.)
Utilities
Other (specify)
Total Fixed Costs (TFC)
Manufacturing
Payroll
Break - Even UnitS (X) X = TFC / (P-V)
Break - Even UnitS (S) S = X * P = TFC / CMR
Contribution Margin per unit (CM) = P - V
Contribution Margin Ration (CMR) = 1 - V/P = cm / P
Variable Costs Based on Percentage
Total Variable Cost per Unit (V)
Break - Even Point

4ACCOUNTING
Multiple Product Breakeven Analysis
The multiple product breakeven analysis has been well carried out for the company with the help
of the given formula:
Breakeven Point: Total Fixed Expenses/(Weighted Average Selling Price- Weighted Average
Variable Expenses).
 Whereby Fixed Expenses: $500,000
 Weighted Average Selling Price:
 =($699*50%)+($999*30%)+(1099*20%).
 =$869
 Weighted Average Variable Expenses:
 =($419*50%)+($599*30%)+(659*20%).
 =$521
 Thus Breakeven Point will be around: $500,000/(869-521).
 Breakeven Point in Units: 143,678 Units.
Now the Number of Units that needs to be Sold for Each Product will be calculated based on the
percentage of products that would be sold by the company as shown below whereby the total
breakeven point for Apple iPhone 11 was calculated to be around 71,839 Units, 11 Pro would be
43,103 Units and 11 Max would be around 28,736 Units.

5ACCOUNTING
Breakeven Analysis
Particulars iphone 11 iphone 11 Pro iphone 11Max
Sales Price
$
699.00
$
999.00
$
1,099.00
Variable Expense Per Unit
$
419.40
$
599.40
$
659.40
Sales in Percentage 50% 30% 20%
Total Fixed Costs
$
50,000,000
BP: Fixed Exp./(Weighted Avg Sale Price- Weighted Avg Variable Exp)
Fixed Expenses
$
50,000,000.00
Weighted Average S.P 869 =(699*50%)+(999*30%)+(1099*20%)
Weighted Average V.C 521 =(419*50%)+(599*30%)+(659*20%)
Breakeven Point (In Units) 143,678
Now the Number of Units that needs to be Sold for Each Product
iphone 11 50% 71,839
i Phone Pro 30% 43,103
i Phone Max 20% 28,736
Total Number of Units to be Sold 143,678

6ACCOUNTING
Bibliography
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Computational Science and Its Applications (pp. 516-531). Springer, Cham.
Hatch, M. D., Daniels, S. D., Glerum, K. M., & Higgins, L. D. (2017). The cost effectiveness of
vancomycin for preventing infections after shoulder arthroplasty: a break-even
analysis. Journal of shoulder and elbow surgery, 26(3), 472-477.
Lee, M., Hong, T., Koo, C., & Kim, C. J. (2018). A break-even analysis and impact analysis of
residential solar photovoltaic systems considering state solar incentives. Technological
and Economic Development of Economy, 24(2), 358-382.
Safieddine, F., & Nakhoul, I. (2016). Carbon Break Even Analysis: Environmental Impact of
Tablets in Higher Education. Carbon, 7(5).