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Theme 2 - Coggle Diagram
Theme 2
Break-even 2.2.3
Using contribution to calculate the break-even point
Margin of safety
Interpretation of break-even charts
Break-even point: ototal fixed costs + total variable costs = total revenue
Limitations of break-even analysis
Contribution: selling price – variable cost per unit
Budgets 2.2.4
Variance analysis
Purpose of budgets
Difficulties of budgeting
Types of budget
Historical Figures
Zero Based
Sales Forecasting 2.2.1
Purpose of sales forecasting
Factors affecting sales forecasting:
Consumer trends
economic variables
actions of competitors
Difficulties of sales forecasting
Sales, revenue and costs 2.2.2
Calculation of sales volume and sales revenue
Calculation of fixed and variable costs