Subject:Business Enterpreunership
Post on 10-Feb-2016
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Muhammed Samsuzzaman E mail: zaman.seoti2504@gmail.com
Senior Teacher
Kakoli High SchoolSchool E mail: kakolihs@gmail.com
Web address: www.kakolihighschool.com
Subject:Busin
ess Enterpreunersh
ip
Let’s watch the picture
What is your evaluation?
Make profit
Today’s Lesson
Profit Planning Analysis
If a seller sold a product at Tk. 50
If its cost is Tk. 40
Find out profit?
Tk. 10
Profit = Sales price – Cost price
Oppositely
Loss = Cost – sales
Cost
1. Fixed cost 2. Variable cost
Rent
Insurance
Salary Labor
Material
Factory OH
Sales price per unit
Variable cost per unit
Contribution Margin per unit
SP
VC
CM
Lenovo company sold a product at Tk. 20 , its variable Cost per unit Tk. 12 and Fixed cost Total
Tk. 20,000
Sales price per unit
Variable cost per unit
Tk. 20
Tk. 12
Contribution Margin per unit Tk. 8
SP
VC
CM
CM = -SP VC
So we find that Tk. 8 is earn from one unit. It is not profit. Carefully think that we deduct only variable cost. Fixed cost totally denied. But we have to deduct fixed cost to find out actual profit . Fixed cost is Tk. 20,000 . How many units need to sale to cover this fixed cost Tk. 20,000?
Tk 8 earn from 1 unit
Tk 20,000 earn from __________ unit
Yes!
Tk. 20,000
Tk. 8
Fixed cost
Contribution margin per unit
2500 unit
Fixed cost
Contribution margin per unit
Break even point =
Sales (2500X20) = 50,000
Less , Variable cost(2500 X 12) = 30,000
Contribution Margin = 20,000
Less , Fixed Cost = 20,000
Profit = 0
Income statement for 2500 unit
So, we found that Break Even Point (BEP) is a point where no profit and no loss.
0 500 1000 1500 2000 2500 3000
60,000
50,000
40,000
30,000
20,000
10,000
0
Taka
Unit
FC
Sales Line
Variable cost Line
Sales per unit Tk. 60 Variable per unit Tk. 40 , Fixed Cost Tk. 80,000 .
i) What Is CM?ii) What is Break even point and Break even sales?iii) If the company wants to make profit Tk. 20,000. How
many unit must be sold?
Evaluation
CM = SALES PER UNIT – VARIABLE COST PER UNIT = 60 – 40 = 20
BEP = FC / CM per unit = 80,000 / 20 = 4000 unit.
Break even sales = 4000 unit X 60 = 2,40,000.
Target sale = ( FC + Desire Profit)/ CM per unit = (80,000+ 60,000) / 20 = 7,000 unit
Optical company sold a unit at Tk. 100 , its variable Cost per unit Tk. 80 and Fixed cost Total Tk. 1,20,000.
i) Find out BEP ?Ii) If The Company wants to make a
Profit Tk. 60,000 how many unit must be sold?
Iii) Draw a break even chart.
Home work
Thanks To All .
?Sales Tk. 50
Cost Tk. 40 Tk. 10Profit
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