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    Business Math

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    Nathaniel
    The document provides information and questions about break-even analysis for a business. It defines variable costs as changing with production output and fixed costs as expenses independent of production volume. Total costs equal fixed plus variable costs. Revenue comes from normal sales. The break-even point is where sales equal costs, with zero profit or loss. It occurs when contribution margin (selling price minus variable cost) covers fixed costs. An example calculates the number of shirts Ronnie must sell to break-even.

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    Business Math

    Uploaded by

    Nathaniel
    135 views23 pages
    The document provides information and questions about break-even analysis for a business. It defines variable costs as changing with production output and fixed costs as expenses independent of production volume. Total costs equal fixed plus variable costs. Revenue comes from normal sales. The break-even point is where sales equal costs, with zero profit or loss. It occurs when contribution margin (selling price minus variable cost) covers fixed costs. An example calculates the number of shirts Ronnie must sell to break-even.

    Original Description:

    A lesson Presentation for Classroom Observation

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    The document provides information and questions about break-even analysis for a business. It defines variable costs as changing with production output and fixed costs as expenses independent of production volume. Total costs equal fixed plus variable costs. Revenue comes from normal sales. The break-even point is where sales equal costs, with zero profit or loss. It occurs when contribution margin (selling price minus variable cost) covers fixed costs. An example calculates the number of shirts Ronnie must sell to break-even.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    135 views23 pages

    Business Math

    Uploaded by

    Nathaniel
    The document provides information and questions about break-even analysis for a business. It defines variable costs as changing with production output and fixed costs as expenses independent of production volume. Total costs equal fixed plus variable costs. Revenue comes from normal sales. The break-even point is where sales equal costs, with zero profit or loss. It occurs when contribution margin (selling price minus variable cost) covers fixed costs. An example calculates the number of shirts Ronnie must sell to break-even.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 23

    1.

    Define and describe break-even;


    2. Compute the break-even point;
    Do the challenge in 3 minutes.
    1. What is the scientific concept
    behind the activity?
    2. What terms or words from the
    activity that best relate or associate
    with “break-even”?
    “Magnegosyo Ta!:
    Starting up a Business”
    Cost of Rent
    Salaries
    Payment of Utilities
    Cost for Raw Materials
    Cost for Production
    Selling Price of Products

    Type or Name of Business :

    Expenses Amount

    Do the activity in 3 minutes.


    1. Of your start-up business, which are the expected
    monthly expenses? Production dependent expenses?
    2. What do you call the costs that depend on the volume
    of production? What about the costs incurred
    regardless of the volume of production?
    3. How will your start-up business earn money?
    4. How would you know that you are gaining profit? Or
    incurring a loss?
    5. What happens when your cost and expenses is equal
    to the sales?
    6. If you were to find the break-even point of your start-
    up business, what would it be?
    • Variable costs are corporate expenses that change in
    proportion to production output.
    • Fixed costs or overhead costs are expenses that have
    to be paid by a company, independent of any specific
    business activities. These are costs incurred regardless
    of the volume of production.
    • Total cost includes both the Fixed Costs and Variable
    Costs: TC = FC + VC
    • Revenue is the income generated from normal
    business operations: R = p * x
    where p = price of item; x = number of units sold
    • Break-even Point is the price point at which the sales
    is equal to the costs, generating zero profit and zero
    loss.

    BREAK-EVEN POINT
    = FIXED COST ÷ CONTRIBUTION MARGIN (OR MARKUP)

    where CONTRIBUTION MARGIN


    = SELLING PRICE – VARIABLE COST
    1. What information
    can be taken from
    the situation?
    2. What is the
    contribution margin?
    3. How many shirts
    should Ronnie sell to
    be able to break
    even?

    Ronnie imports branded shirts from Los Angeles.


    He buys each shirt at Php 125 and sells it at Php 220
    each. He also spends a total of Php 133 000 for the
    taxes, wages of distributors, rent of warehouse,
    distribution and weight costs, etc.
    For items 1 to 3, choice the letter which corresponds to
    the correct answer.

    1. Mateo wants to start a business for calamansi juice


    stand. He has decided to use his savings to purchase
    the newest and fastest juicer called the JuiceItAll
    which costs Php 200.00 and in addition he buys
    calamnsi, water, sugar, and ice at a cost of Php 20.00
    per cup of lemonade. If Timmy decides to sell his
    lemonade at Php 30.00 per cup, how many cups of
    lemonade will he have to sell to break even?
    A. 10
    B. 20
    C. 30
    D. 40

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