Break Even Analyse Essay example

Submitted By Medeea1996
Words: 489
Pages: 2
Open Document
TASK A ( Ilustrate the use of budgets)

A budget is a financial plan which helps a business to see which are their incomes and their expenditures for different periods of time. The main objective of a budget is to provide information that enables the business to take control of their finances.
The purpose of a budget is to help the company manage their costs and their expenditures.
Managing costs is an important aspect of managing financial resources. Managing costs for a business are crucial because help the business to spend their money for what they need for the company.
A budget helps a business to establish efficient use of resources, help monitor cash flow and identify departures from plans and maintains a focus and discipline for those involved.
Sodor Café can use a budget by simply setting up one. The budget needs to be realistic, agreed, coordinated, challenging and flexible.
If they don’t use a budget they might have different problems like : they can have higher costs which maybe they can’t cover with sales so their company will be in loss.
TASK B( Costs and revenues for 2013 )
Figure 2

Annual sales / output of lunch Packs
Total variable cost (at £2.00 each)
Annual fixed cost
Total costs
Total revenue (selling price of £3.50 )
0
0
£40.020
£40.020
0
16.000
£32.000
£40.020
£72.020
£56.000
32.000
£64.000
£40.020
£104.020
£112.000
48.000
£96.000
£40.020
£136.020
£168.000
64.000
£128.000
£40.020
£168.000
£224.000
80.000
£160.000
£40.020
£200.020
£280.000

Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Total
Salaries
£1,085.00
£1,085.00
£1,085.00
£1,085.00
£1,085.00
£1,085.00
£1,085.00
£1,085.00
£1,085.00
£1,085.00
£1,085.00
£1,085.00
£13,020.00
Bank loan
£400.00
£400.00
£400.00
£400.00
£400.00
£400.00
£400.00
£400.00
£400.00
£400.00
£400.00
£400.00
£4,800.00
Equipment
£1,300.00
£1,300.00
£1,300.00
£1,300.00
£1,300.00
£1,300.00
£1,300.00
£1,300.00
£1,300.00
£1,300.00
£1,300.00
£1,300.00
£15,600.00
Insurance
£100.00
£100.00
£100.00
£100.00
£100.00
£100.00
£100.00
£100.00
£100.00
£100.00
£100.00
£100.00
£1,200.00
Rent
£2,100.00
£2,100.00
£2,100.00
£2,100.00
£2,100.00
£2,100.00
£2,100.00
£2,100.00
£2,100.00
£2,100.00
£2,100.00
£2,100.00
£25,200.00
Advertising
£150.00
£150.00
£150.00
£150.00
£150.00
£150.00
£150.00
£150.00
£150.00
£150.00
£150.00
£150.00
£1,800.00
Sundry expenses
£200.00
£200.00
£200.00
£200.00
£200.00
£200.00
£200.00
£200.00
£200.00
£200.00
£200.00
£200.00
£2,400.00

Total
£5.335.00
£5,335.00
£5,335.00
£5,335.00
£5,335.00
£5,335.00
£5,335.00
£5,335.00
£5,335.00
£5,335.00
£5,335.00
£5,335.00
£64,020.00
TASK C (Budgeted costs for the equipment and rent for 2014)
Figure 3

TASK D (Budgeted costs and revenues for 2014)
Figure 4

Annual sales / output of lunch Packs
Total variable cost (at £2.20 each)
Annual fixed cost
Total costs
Total revenue (selling price of £4.00 )
0
0
£64.020
£64.020
0
16.000
£35.000
£64.020
£99.220
£64.000
32.000
£70.400
£64.020
£134.420
£128.000
48.000
£105.600
£64.020
£169.020
£192.000
64.000
£140.800
£64.020
£204.820
£256.000
80.000
£176.000
£64.020
£240.020
£320.000

TASK E (Break-even point for 2013)
Figure 2

Break-even point : 26.680 units

The price for Pack lunch boxes (selling price/each) – The price
Show More

Related Documents: Break Even Analyse Essay example

Essay on Business: Economics and Break-even Analysis

importance of cash flow and break even for the effective management of business finance. D1 Why is break-even useful for businesses? Break-even analysis is very useful. It helps business people when they are making decisions related to new ventures – the `what if ‘situation you read about earlier. At the stroke of a pen, different possibility can be tested out on paper – without investing thousands of pounds to make mistakes the hard way How can businesses use break-even to benefit them?…

Words 373 - Pages 2

Financial forecasting 120 Essay

MARIELA RAVNACHKA UNIT 3 FINANCIAL FORECASTING FOR BUSINESS TASK 1 Start-up costs are linked and associated with setting-up a business such as legal fees, purchasing of equipment, rented property deposit. Start-up costs means a different sort of costs, which a new business owner should get in so that the business can exist. Operating costs are expenses that relate to a business activities and they are divided into fixed and variable costs. Different businesses have different costs associated…

Words 1612 - Pages 7

Sample Marketing Plan Outline

Marketing Plan Outline I. Executive Summary A high-level summary of the marketing plan. II. The Challenge Brief description of product to be marketed and associated goals, such as sales figures and strategic goals. III. Situation Analysis Company Analysis Goals Focus Culture Strengths Weaknesses Market share Customer Analysis Number Type Value drivers Decision process Concentration of customer base for particular products Competitor Analysis Market position…

Words 311 - Pages 2

Aspects Of Contract And Negligence For Business

buy this item’ that may count as your offer to buy the goods or service  Mail contract : When you fill in an order form to buy something from a mail order brochure or in response to an advert, it is likely that you are making an offer to buy Analyse of contracts  Terms and condition : When you buy something you make a contract with the trader. Every consumer contract has terms and conditions, setting out your rights and the things that you and the trader have agreed to do  Warranty : are…

Words 715 - Pages 3

08 Level 3 CSTR study and assessment guide AQ2013 Essay

required for decisionmaking, using both short term and long term estimates of costs and revenues. This includes calculations and/or explanations relating to changes in unit costs/profit as activity levels change; segmented profit/loss by product; break-even (C-V-P) analysis; limiting factor decision making; job, batch, unit, process and service costing; reconciling budgeted and actual costs and revenues by means of flexible or fixed budgets; and capital investment appraisal techniques. Learning objectives…

Words 3173 - Pages 13

Essay on The Lazy Mower: Is It Really Worth It

|74.153% | 3. Realizing that the CIC will demand some kind of sensitivity analyses, how should Dave and Rick prepare their report? Which variables or inputs are obvious ones that…

Words 1047 - Pages 5

Essay Hallstead Jewelers Case Analysis

are increased by $200,000 from greater advertising costs. The new break-even points in units and dollars: | 2004 | 2005 | 2007 | Sales per unit | $916 | $877 | $891 | Variable cost per unit | $498 | $482 | $499 | Contribution margin per unit | $418 | $395 | $392 | Break-even in units | 8,089 | 8,827 | 13,197 | Break-even in dollars | $7,411,993 | $7,739,788 | $11,751,874 | Break-even points in units compared to the original income statement in question…

Words 1572 - Pages 7

Essay about Easter School Questions

and prices in the market change? a. Break-even: The selling prices for the experience change depending on the length of the flight or who the flight is being sold to. Variable costs such as fuel increase and decrease regularly, also fixed costs such as insurance can rise at any time. Showing that calculating her break-even will be tricky as costs to calculate break-even aren’t set and can change at any point, not giving her an accurate figure of break-even b. Cash flow: She won’t be able to accurately…

Words 894 - Pages 4

Essay about Financial Resources Unit 2 A03

Financial resources 1) Internal finance Internal Source of finance: Internal sources of finance are funds found inside the business. It means that the business finances its activities (including investments) with its own money without outside help. The internal are composed of: * its existing equity, the personal sources * its own profitability (cash flow, reserves, capital gains). * its savings 2) External finance When the internal resources are not sufficient, the…

Words 1610 - Pages 7

Essay about Utilizing Research

hypothesis and a research question. I will be explaining the types of research methodologies. Including the types of data collection tools used in health care research. This paper will have some sampling methodologies. Also the types of statistical analyses. Explain the steps in the research process There are many different styles in the research…

Words 1121 - Pages 5