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Entrep 1

The document provides information on forecasting revenues and costs, including calculating mark-up and selling price. It discusses forecasting as a tool to help management plan for uncertainties and estimates are made based on past and present data. An example is provided on calculating projected daily, monthly, and yearly revenues for a clothing business based on projected sales volumes and costs. Key assumptions are noted including expected changes in revenues over months.

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JONESSA GAMBITO
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446 views35 pages

Entrep 1

The document provides information on forecasting revenues and costs, including calculating mark-up and selling price. It discusses forecasting as a tool to help management plan for uncertainties and estimates are made based on past and present data. An example is provided on calculating projected daily, monthly, and yearly revenues for a clothing business based on projected sales volumes and costs. Key assumptions are noted including expected changes in revenues over months.

Uploaded by

JONESSA GAMBITO
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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GOOD

MORNING
Objective:
• Identify essential factors in forecasting revenues and
costs;
• Calculate mark-up and selling price of a product or
merchandise;
• Compute projected revenues; Compute projected costs.
• Create a table showing projected revenue and costs.
Forecasting is a tool used in planning that
aims to support management or a
business owner in its desire to adjust and cope
up with uncertainties of the future.
Forecasting depend on data from the past and
present and make meaningful
estimates on revenues and costs.
Forecasting revenues and costs is the same as
weather forecasting
Motivational
Activity
Have you tried estimating the time that it takes you to travel
from home to school? Try to fill in the necessary information in
the table below. Write your estimate in Estimated Time
column, after arriving to school fill in the Actual Time in the
blank provided.

● Estimated Time Actual Time


● 1. ____________. __________
● 2. ____________ __________
● 3. ____________ __________
Revenue is a result when sales exceed the cost to
produce goods or render the services. Revenue is
recognized when earned, whether paid in cash or charged
to the account of the customer. Other terms related to
revenue includes Sales and Service Income.

Sales is used especially when the nature of business is


merchandising or retail.

Service Income is used to record revenues earned by


rendering services.
External and Internal
Factors
1. The economic condition of
the country.
2. The competing businesses or
competitors.
3. Changes happening in the community.
• Demographic,
• Lifestyle, and
• Buying behaviour gives the

For example, teens usually follow popular


celebrities especially in their fashion trend.
Being able to anticipate these changes allows
the entrepreneur to maximize sales potential.
4. The internal aspect of the business.

For example, a “Puto” maker can


only make 250 pieces of puto every day;
therefore he/she can only sell as much as
250 pieces of puto every day.
How to Calculate?
Example: Ms. Fashion Nista recently opened her dream
business and named Fit Mo’to Ready to Wear Online Selling
Business, an online selling business which specializes in ready to
wear clothes for teens and young adults. Based on her initial
interview among several online selling businesses, the average
number of tshirts sold every day is 10 and the average pair of
fashion jeans sold every day is 6. From the information
gathered, Ms. Nista projected the revenue of her it Fit Mo’to
Ready to Wear Online Selling Business. She gets her supplies at
a local RTW dealer in the city. The cost per piece of t-shirt is 90
pesos, while a pair of fashion jeans costs 230 pesos per piece.
She then adds a 50 percent mark up to every piece of RTW
sold.
Table 1 Projected Daily Revenue
Fit Mo'to Ready to Wear Online Selling Business

Cost per Mark-up Selling Projected Projected


Type of
Unit 50% Price Volume Revenue
RTW's
(A) (B) (C) (D) (E)

Average

No. of
Items Sold (Daily)
(Daily)

(B)= (A
(A) (C)= (A+B) (D) (E) =(C x D)
x .50)

Total
Table 2 Projected Monthly and Yearly Revenue
Fit Mo'to Ready to Wear Online Selling Business

Selling Projected Projected Projected Projected


price Volume Revenue Volume Revenue
Average Average
No. of No.
Items of Items
Sold Sold
(Monthly) (Yearly)
No. of
(Monthly) Items Sold (Yearly)
(Daily)
F= (D x 30 H= (D x 365
(C)= (A+B) G= (C x F) I= (C x H)
days days

Total
Table 3 Projected Monthly Revenue
Fit Mo'to Ready to Wear Online Selling Business

Month January February March April May June

Revenue

Septemb Novembe Decembe


Month July August October
er r r

Revenue
Important Assumptions:

● February to May Increase of 5% from previous


revenue
● June Increase of 10% from previous revenue
● July to August The same Revenue
● September to October Loss 5% from previous
revenue
● November Increase 5% from previous revenue
● December Increase 10% from previous revenue
Try Me!
Aling Minda is operating a buy and sell
business, she sells broomsticks (walis tingting)
in her stall at a local market. She gets her
broomsticks from a local supplier for 25 pesos
each. She then adds 50 percent mark-up on
each broomstick. Every day, aling Minda can
sell 30 broomsticks a day.
What I Have
Learned
Entrepreneurs use ______________ techniques to determine
events that might affect the operation of the business. Factors such as
__________ and _________ much be considered to avoid possible
complications in the future. To forecast revenues, it is best that the
entrepreneur must be acquainted with the_________, and __________
to determine the selling price of a product. This way, the selling price
is then multiplied to the projected volume to arrive with the
______________.

The entrepreneur should always present the assumptions to


consider in projecting revenues, may it be seasonality, economic slow
down or changes in costumer preferences and the like. This will help
achieve the best educated estimate of your revenues.
Assesment
1. Refers to the amount added to the cost of a
product to determine the selling
price –
a. Revenue
b. Cost
c. Mark Up
d. Mark Down
2. It is a tool that allows managers to make
educated estimates on revenue
and costs of the business in order to cope up
with uncertainties of the future–
a. Estimating
b. Guessing
c. Forecasting
d. Benchmarking
3. It is a planning tool that helps entrepreneur
copes up with uncertainties in the future
operation of the business.
a. Revenue
b. Selling
c. Benchmarking
d. Forecasting
4. Refers to goods and merchandise at the
beginning of operation of business
or accounting period.
a. Merchandise Inventory, end
c. Expenses
b. Merchandise Inventory, beginning
d. Freight-in
5.Costs incurred through payment of utilities
such as electricity and water -
a. Revenue c. Mark-up
b. Operating expenses d. Free
6.Merchandise or goods purchased are
referred to as –
a. Purchases c. Costs
b. Operating Expenses d. Loss
7.It is the result when cost to produce goods
or render services is greater than
the sales –
a. Selling
b. Revenue
c. Benchmarking
d. Loss
8.Aling Marta sells bibingka in her neighbourhood,
every day she can sell 45
pieces of bibingka at 20 pesos each. How much is
her daily revenue?
a. 900.00 b. 450.00 c. 800.00 d. 1000.00
9. The selling price of an item or merchandise is
computed by adding cost per
unit and __________?
a. Revenue b. Mark Up c. Discount
d. Number of Items
10. Aling Elvie sells t-shirt at 175.00 pesos
each. If each t-shirt costs 135.00 pesos.
How much is the mark-up?
a. 30.00
b. 45.00
c. 40.00
d. 50.00
1. C
2. C
3. D
4. B
5. B
6. A
7. D
8. A
9. B
10. C
THANK YOU FOR
LISTENING!

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