Know about budget

1. Energy Device Inc.

2. BREAKEVEN POINT (IN UNITS)
1. Break Even (units) Formula:
 Fixed cost/Contribution
 (Contribution= Selling price- Variable cost)
2. Break Even (units) Shower Nozzles:
27040/(10-8)= 13520 units
3. Break Even (units) Thermostats:
6760/(80-70)= 676 units
4. Break Even (units) Storm windows:
16900/(100-95)=3380 units

3. Ways to Eliminate Losses
Estimated Budget Showing Profit
Particulars Shower Nozzles Thermostats StormWindows
Number of items 4000 400 1200
Price/ item $12 $85 $105
Total Revenue $48000 $34000 $126000
Purchase price/ item $6 $65 $90
Total purchase cost $24000 $26000 $108000
Fixed cost
$22000 $6500 $16000
(including Labor)
TOTAL COST $46000 $32500 $124000
PROFIT $2000 $1500 $2000

4. Contd………..
 Bulk Purchase
 Encourage to Promotional Activity
 Reduce Unnecessary Labour
 Emphasis on cost reduction
 Moving above Break even point

5. Financial Concern To boost sale
Particulars Thermostats
Number of items 500
Price/ item $85
Total Revenue $42500
Purchase price/ item $65
Total purchase cost $32500
Fixed cost
(including Labor+ Advertisement)
$6760+$1000=7760
TOTAL COST $40260
PROFIT $2240

6. Advice regarding Shower Nozzles
 Bulk Purchase
 Encourage to Promotional Activity
 Reduce Unnecessary Labour
 Emphasis on cost reduction
 Moving above Break even point

7. Contd……….
Particulars Shower Nozzles
Number of items 4000
Price/ item $12
Total Revenue $48000
Purchase price/ item $6
Total purchase cost $24000
Fixed cost
$22000
(including Labor)
TOTAL COST $46000
PROFIT $2000

8. Thanks……….