# Sample Case Study Paper on Repeat Company

##### Break-even price for the company

At Break-even point,

Total revenue = Total costs and therefore profit =0

Break-even sales (BEP) in units= 50000

BEP=

Fixed costs= 100000+125000+50000

= \$275,000

50000=

50000CM=275,000

CM= 275000/50000

= 5.5

Contribution margin= 5.5

BEP in shillings:

=

CMR= ×100

Selling price= contribution margin + variable costs

= 5.5+4.25+2.25

= \$12

CMR= ×100

= 45.8333%

BEP in shillings=

= \$600,000

1. ##### Maximum amount the company can pay for the training program in order to break-even.

Margin of safety (MOS) = 158088

Variable manufacturing costs decreases by 0.75

Sales units increase by 20%

MOS= total sales- breakeven sales

Increase in sales = 20% ×50000

= 10,000 units

New variable manufacturing costs:

= 4.25-0.75

= \$3.5

##### Revenue increase:

= (0.75×50000) + 10000[12-(3.5+2.25)

= 37500+62500

= \$100000

At BEP; contribution-fixed costs=0

Therefore maximum amount to pay for the training program;

= revenue increase + margin of safety

= \$100000+ \$158088

= \$258,