Business Administration - Entrepreneurship and Small Business EBM530 Chapter Notes - Chapter 5: Linkedin, Sales Operations
20 Apr 2018
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6. 1. 3 break even analysis (optional but useful for product based businesses) Total overhead costs (fixed costs incurred regardless of sales volume) A break even analysis calculates at what point sales cover all expenses, or at what point a profit is generated. This analysis is particularly useful for product based businesses as it shows how many units must be sold to generate a profit. If you have more than one product you will need to calculate the % of each product you will sell and also the cost of producing that product. C: fixed costs for the year are ,000 (telephone, marketing, rent etc. ) average sale price is /mug average production cost is /mug (material and labour) You would start to make a profit after selling 1,667 mugs. Sales forecasting may seem like a guessing game. However, an effective sales forecast looks at some basic assumptions and builds on that.
