This Graph is showing what people like to drink. In the graph you can see that the best drink is Irn – Bru and least drink is 7 – UP.
This Graph is showing what type of sweets you like. In this graph you can see that the most favourite sweet is Star Burst an the least Favourite is Skittles.
This graph is about what chocolates you like. And in the graph you can see that the most favourite chocolate is Kit – Kat Chunky. And the least favourite is Kinder Surprise.
This Graph is about Different crisp Flavour. In this graph you can see that the most favourite flavour is Cheese and onion and the least Favourite is Tomato.
This Graph is about how much people are willing to pay for sweets. You can clearly see that people want to pay 30p for it.
This graph is about how much are people willing to pay for a can of drink. You can see that nearly all people want to pay 45p for it.
This Graph is about how much are people will to pay for a packet of crisps. And same as one before, nearly all people want to pay 30p for it.
This graph is about How much money do people bring to school. All of the people you can see on the graph brings 80p - £1.
This graph here show’s that how many people are willing to pay for sweets, crisps and drinks. And every one chosen to pay about £ 1.20.
In this section of the assignment I will be making TWO Break – even charts, and Four Working outs because I want to see what will change and how much profit I will be making and where will my break eve3n will be. A break – even is where neither a profit nor a loss is made. At this point the money flowing out of the business is matched exactly by the amount of money flowing into the business.
What I am doing is basically forecasting and sees what costs will change how it will affect my break Even point because if any off these did change I will be prepared to do something to keep my business running smooth and not to be under debt.
For my first break – even chart I will sell my goods from my tuck shop at a very cheap price then the local sweet shop which surrounds the school. And see what the break – even chart shows.
I predicted that the cheaper the price of the goods that I am selling the higher the break – even point will be.
For my second break – even chart I will sell my goods from my tuck shop at an slightly higher price then the local sweet shop and see how the break even chart changes.
I predict that the break – even point will be lower then the first break – even chart.
For my third and fourth Break even chart I will change my fixed costs because I want to see what will change in my Break – even point.
I predicted that higher the fixed cost the higher the break –even point will be, and the lower the fixed cost the lower the Break – even chart will be.
For my Fifth and Sixth Breakeven graph, I will change variable costs because I want to see how it will affect my Break – Even point.
Original sums and totals
Fixed costs
Rent = £1950 per anum
Bills = £210.60 per anum
Total fixed cost = £2160.60 anum
Variable costs
Stock (crisp, dinks, and chocolates)
Crisps = 15p
Drinks = 20p
Chocolates = 17p
Total variable cost = 52p
Average cost = 52p/3 = 17.3333p (rounded to 17p)
Revenue (selling price)
Crisps = 35p
Drinks = 45
Chocolates = 30p
Total revenue = £1.10
Average cost = 110p/3 = 36.666p (rounded to 37p)
To work out my Break even I need to use a formula which is:
Fixed cost
Selling price – Variable cost
£2160.60 £2160.60
= = 10803 customer to break even
37p- 17p 20p
Break even
Working out stage #1
Fixed costs
Rent = £1950 per anum
Bills = £210.60 per anum
Total fixed cost = £2160.60 anum
Variable costs
Stock (crisp, dinks, and chocolates)
Crisps = 15p
Drinks = 20p
Chocolates = 17p
Total variable cost = 52p
Average cost = 52p/3 = 17.3333p (rounded to 17p)
Revenue (selling price)
Crisps = 35p
Drinks = 45
Chocolates = 30p
Total revenue = £1.10
Average cost = 110p/3 = 36.666p (rounded to 37p)
To work out my Break even I need to use a formula which is:
Fixed cost
Selling price – Variable cost
£2160.60 £2160.60
= = 10803 customer to break even
37p- 17p 20p
This Table here will allow me to make a first break even Chart.
Break even
Working out stage #2
Fixed costs
Rent = £1950 per anum
Bills = £210.60 per anum
Total cost = £2160.60 anum
Variable costs
Stock (crisp, dinks, and chocolates)
Crisps = 15p
Drinks = 20p
Chocolates = 17p
Total = 52p
Average cost = 52p/3 = 17.3333p (rounded to 18p)
Revenue (selling price)
Crisps = 45p
Drinks = 70p
Chocolates = 40p
Total = £1.55
Average cost = 155p/3 = 51.333p (rounded to 51p)
To work out my Break even I need to use a formula which is:
Fixed cost
Selling price – Variable cost
£2160.60 £2160.60
= = 6354 customer to break even
51p- 17p 34p
This Table here will allow me to make a first break even Chart.
Break even
Working out stage #3
Fixed costs
Rent = £2500 per anum
Bills = £300 per anum
Total fixed cost = £2800 anum
Variable costs
Stock (crisp, dinks, and chocolates)
Crisps = 15p
Drinks = 20p
Chocolates = 17p
Total variable cost = 52p
Average cost = 52p/3 = 17.3333p (rounded to 17p)
Revenue (selling price)
Crisps = 35p
Drinks = 45
Chocolates = 30p
Total revenue = £1.10
Average cost = 110p/3 = 36.666p (rounded to 37p)
To work out my Break even I need to use a formula which is:
Fixed cost
Selling price – Variable cost
£2800 £2800
= = 14000 customer to break even
37p- 17p 20p
Break even
Working out stage #4
Fixed costs
Rent = £1000 per anum
Bills = £200 per anum
Total fixed cost = £1200 anum
Variable costs
Stock (crisp, dinks, and chocolates)
Crisps = 15p
Drinks = 20p
Chocolates = 17p
Total variable cost = 52p
Average cost = 52p/3 = 17.3333p (rounded to 17p)
Revenue (selling price)
Crisps = 35p
Drinks = 45
Chocolates = 30p
Total revenue = £1.10
Average cost = 110p/3 = 36.666p (rounded to 37p)
To work out my Break even I need to use a formula which is:
Fixed cost
Selling price – Variable cost
£1200 £1200
= = 6000 customer to break even
37p- 17p 20p
Break even
Working out stage #5
Fixed costs
Rent = £1950 per anum
Bills = £210.60 per anum
Total fixed cost = £2160.60 anum
Variable costs
Stock (crisp, dinks, and chocolates)
Crisps = 25p
Drinks = 30p
Chocolates = 25p
Total variable cost = 52p
Average cost = 80p/3 = 26.666p (rounded to 27p)
Revenue (selling price)
Crisps = 35p
Drinks = 45
Chocolates = 30p
Total revenue = £1.10
Average cost = 110p/3 = 36.666p (rounded to 37p)
To work out my Break even I need to use a formula which is:
Fixed cost
Selling price – Variable cost
£2160.60 £ 2160.60
= = 21606 customer to break even
37p- 27p 10p
Break even
Working out stage #6
Fixed costs
Rent = £1950 per anum
Bills = £210.60 per anum
Total fixed cost = £2160.60 anum
Variable costs
Stock (crisp, dinks, and chocolates)
Crisps = 12p
Drinks = 15p
Chocolates = 12p
Total variable cost = 39p
Average cost = 39p/3 = 13p
Revenue (selling price)
Crisps = 35p
Drinks = 45
Chocolates = 30p
Total revenue = £1.10
Average cost = 110p/3 = 36.666p (rounded to 37p)
To work out my Break even I need to use a formula which is:
Fixed cost
Selling price – Variable cost
£2160.60 £2160.60
= = 9002.5 customer to break even
37p- 13p 24p
As you can see at the last few pages about the break – even chart there is a difference in those two charts and it is on how many customers are needed to break even. On the first break even chart there were 10803 customers to break even, and on the second break even chart there was 6354 customer to break even.
So my prediction was correct that the cheaper the price of the goods that I am selling the higher the break- even point.
I will choose Break even chart number one, because I believe that I will get that number of customers because of the price of the goods I am selling is cheap.
As you can see on Break – even chart 3 – 6 you can see dramatic changes in the break – even points and this can seriously cause a lot of damage as in financial mainly in debt.
It is very important to produce a Break – Even Chart because it is a forecast of the business. It is important because it sees how many customers you need to break – even and to see where is the profit section and the loss section. It shows the minimum level of activity required for the business to survive.
To check the accuracy of the break even point I used this formula: -
FIX COST
BREAK – EVEN =
REVENUE (SELLING PRICE) – VARIABLE COST
If there is a problem with it could be very seriously because if I thought that I was making a profit I will be actually making a loss. So it is very important to write the right figures.
I have to make a Cash flow forecast to show money coming in and money going out of the business. I have made this cash flow forecast relating with, break – even chart number 1.
A bank balance means the amount of money in a bank account.
I had to have a bank loan to start up my business a bank loan is when you borrow money from a bank.
It is important to have a cash flow forecast because I have to check how we are doing in the business and checking how much money is coming in to a business and coming out of the business and to have a smooth running of the business.
To check the accuracy of the cash flow forecast you need to check it by using a formula which is: -
+ = - =
In this section I have to create a profit and loss account to see how much profit I have made in one year.
Profit & Loss Statement for ‘SNACK BAR’
For Year Ended 31st December 2001
Definition — gross profit = sales - cost of goods sold.
A sale is the selling price of one unit X number of units sold.
The cost of goods sold is the cost of stock or raw materials bought from suppliers which has been sold.
Net profit is gross profit less expenses.
Expenses are regular ongoing costs which business has in order to buy and sell products.
Profit and loss accounts are important because it shows how much profit you making and it is also a forecast. If the business is doing bad the owner can respond and do something before it happens.
Business Documents
In this section I will talk to you about Business Documents and what do they mean, and I will also produce my own Business Documents.
-
Purchase order: A Purchase order is completed by a customer and sent to a supplier to request the supply of goods of services. A purchase order contains:-
- the type of goods wanted;
- the number of goods wanted;
- the address which the goods must be sent;
- the dates when the goods are needed;
- the price of the goods;
- A reference number and catalogue number of goods.
-
Sales Invoice: A Sales invoice is completed by a supplier and sent to a customer to indicate goods of services sold and the amount to be paid. A Sales invoice contains and shows: -
- the description of goods being sold;
- how many goods are being sold;
- the address to which the invoice should be sent;
- the address to which the goods must be sent;
- the price of goods;
- any discount from the supplier;
- how much VAT to pay on the goods being sold;
- total amount to be paid to the supplier;
- The reference or catalogue number of the goods.
-
Delivery Note: A Delivery Note is completed by a supplier and sent with the goods but not services to show goods being delivered to a customer. A delivery note shows: -
- the address to the seller;
- the delivery note number and reference number;
- description on the goods you bought.
A delivery note can be: -
- posted to the customer; or
- it can travel with the goods.
-
Goods Received Note: A good received note is completed by the customer to record goods (not services) received and their condition. A goods revived note shows: -
- the quantity and the type of all the goods that have been received (even those which have not been ordered);
- if any goods were received in a damaged condition.
-
The Credit Note: A credit note is sent by a supplier to a customer to reduce the amount owed by the customer.
-
Remittance Advice Slip: A remittance advice slip is sent to the supplier with payment (usually by cheque) to indicate which invoices are being paid. A remittance advice slip shows: -
- which invoices are being paid off;
- any credit notes being used to reduce the amount owed.
-
The Cheque: A cheque is a manual method of payment which allows money to be transferred from the customer’s bank account to the supplier’s bank account (electronic payment).
-
The Statement Of Account: A statement is sent to the credit customers to show them the transactions which have affected their account and to encourage them to pay their invoices within the agreed credit period. A statement of account shows: -
- the amount owed by the customer at the beginning of the month;
- the amount owed by the customer at the end of the month.
-
The Receipt: A receipt is given to ‘cash Customers’ As proof that a payment has been made.
-
The Petty Cash voucher: a petty cash voucher is completed when a small payment in note or coins is required and only small payments are used for.
Businesses will choose to write out what they want rather then phoning the supplier. Because if you phone the supplier, the person who answered the phone might get the wrong detail or it did not understand what the customer trying to say so they will get the wrong order. By writing out all of these documents they can get exactly what you want and it will be very smoothly done.
I believe that the business documents are in this order because they need to be easy to complete and in a smooth flow of documents so they can be easily and quickly done.
The business documents are in this order: -
Purchase order
Sales invoice
The Delivery Note
The Credit Note
The Remittance Advice Slip
Cheque
The Statement of Account
The petty Cash Voucher
To produce business documents even faster we can make them on a computer. Because we can make a template on the computer and just reprint them so it is fast and easy to do and the main thing is that it will save time.
A computerised accounting system:
• records all credit sales to customers
• records all cash sales to customers
• produces invoices, credit notes and statements
• lists outstanding payments (usually called an ‘aged debtors report’ — this means the accounts are old!)
• Records all purchases made — both by supplier and type of goods
• Records all accounts which have been paid or still have to be paid to suppliers
• records all bank transactions
• updates the company’s accounts every time a transaction takes place
• produce a variety of ‘reports’ or summaries, e.g. a balance sheet, VAT return, bank analysis, profit and loss account, audit report (which lists all transactions for checking).
But there are advantages and disadvantages. Shown below: -
Advantages: -
- Accountants and auditors (who check the accounts of limited companies) prefer cornputerised accounts information as it can often be checked more easily and quickly (through the audit report) than a manual system.
- The system can be linked to stock control packages and payroll packages.
- Account numbers are allocated automatically by computer. There will be no mistakes made on allocation (e.g. missing out a number by mistake).
- In a paper system documents may get lost or be misfiled. This cannot happen in a computerised system.
- Access to specific sections of the package can be restricted to designated executives or managers, for security.
Disadvantages: -
- A mistake can be difficult to correct. On some software packages it is impossible to cancel a wrong entry — the entry must be adjusted by making an opposite entry. This is required for the audit report which you should think of as a type of security check on all the entries that have been made.
- The computer allocates every customer with a number. This is useful if there are a few regular customers, but may be inconvenient if there are thousands of casual customers.
- Staff using a computer system may fail to check their work. For instance, someone might key in 230 units instead of 23, and not notice. They assume it will be correct!
- It is easy to miss-key or transposes figures. The computer will simply accept the information on most systems — and process it.
- Printing out very large numbers of documents, e.g. invoices, can tie up a printer for several hours, causing inconvenience to other users who share it.
SNACK BAR
Langdon School, Sussex road
East Ham
London
E6
PURCHASE ORDER
TO
O
VAT Registration Number 2924781
CHETAN WHOLESALERS LTD
47/49 RIVER ROAD BARKING
ESSEX IG11 0DA
TEL: 020 8594 8985/8907/1812 FAX: 020 8594 7335
INVOICE
To
CHETAN WHOLESALERS LTD
47/49 RIVER ROAD BARKING
ESSEX IG11 0DA
TEL: 020 8594 8985/8907/1812 FAX: 020 8594 7335
DELIVERY NOTE
To
Received By Date
SNACK BAR GOODS RECEIVED NOTE
Name and Address of Supplier
Received by ……………………………… Date ……………………
CHETAN WHOLESALERS LTD
47/49 RIVER ROAD BARKING
ESSEX IG11 0DA
TEL: 020 8594 8985/8907/1812 FAX: 020 8594 7335
CREDIT NOTE
TO
Reason for Credit
SANCK BAR Tel: 020 8471 2411
E-Mail: [email protected]
Langdon School, Sussex road
East Ham
London
E6
REMITTANCE ADIVCE
To:
CHETAN WHOLESALERS LTD
47/49 RIVER ROAD BARKING
ESSEX IG11 0DA
TEL: 020 8594 8985/8907/1812 FAX: 020 8594 7335
STATEMENT OF ACCOUNT
To:
CHETAN WHOLESALERS LTD
47/49 RIVER ROAD BARKING
ESSEX IG11 0DA
TEL: 020 8594 8985/8907/1812 FAX: 020 8594 7335
RECEIPT
Customer:
PETTY CASH VOUCHER
Cheque