P6
Dear mr Fresco
I have read your letter regarding the break even point for your business and what this term
means. The break even point or BEP is the point at which your running costs are equal to
your revenue, at this point you won’t be losing any money but you also won’t be making any
money.
A budget is something businesses use to assess where they need to allocate the money and
how much revenue needs to be created. Your budgeted for £165000 but your actual
revenue was £135000 this means that you were under for your projected sales by £30000.
The profit predicted after expenses was £91700 but it was actually £56700. The full capacity
output is the maximum amount of pizzas that you are able to produce with your current
resources which is 4500 units at the end of the graph. Your area of profit is anything above
where the grey and orange line meet with your area of loss being anywhere below where
that same line meets.
Dear mr Fresco
I have read your letter regarding the break even point for your business and what this term
means. The break even point or BEP is the point at which your running costs are equal to
your revenue, at this point you won’t be losing any money but you also won’t be making any
money.
A budget is something businesses use to assess where they need to allocate the money and
how much revenue needs to be created. Your budgeted for £165000 but your actual
revenue was £135000 this means that you were under for your projected sales by £30000.
The profit predicted after expenses was £91700 but it was actually £56700. The full capacity
output is the maximum amount of pizzas that you are able to produce with your current
resources which is 4500 units at the end of the graph. Your area of profit is anything above
where the grey and orange line meet with your area of loss being anywhere below where
that same line meets.
