Break even point

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Anton (Querist)

09 October 2014 I have a slight problem working out the bep for a service rental company.

company buys a product for 499(incl shipp and tax).
sells product for 649 (this includes installation and 1st month subscription)
foe the next 11 months the client will enter into a 1 to 5 yr agreement as a rental @ 399/month.

399 per month is pure profit.

how would i work out the bep for this example??

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

10 October 2014 499 plus installation cost is the break even(cost) point.

Anton

Anton (Querist)

10 October 2014 Good day. Ok you have lost me. I need to supply a break even point for a business plan. I am starting a satilite high speed internet service. The modem landed cost 499. I will sell the boxed item to the client for 649. The client will pay 399 for the internet service uncapped. The cost of supplying the service to the client is zero. 399 rental per month is pure profit. The client never has ownership of the unit, its on a rental basis. Let's say 60 000 expenses. Can you work with that? Alternatively I can mail a spreadsheet to you showing income and cost for 5)r projection?

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