Mr Pryer’s Year 10 Classes Break Even Song November 2011 Collated Best Version.

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Presentation transcript:

Mr Pryer’s Year 10 Classes Break Even Song November 2011 Collated Best Version

Here’s a song to help our learning, About what a business should be earning, To cover all that is has been spending, On it our exam grade is depending,

Look for where TR intersects with TC And that is where the break even point will be Aim for this to keep your business on track Not make a loss, givin’ people the sack, yeah

Chorus So what I’ve been asked to do Is work out what we need in revenue To stop us from making a loss Because when we do it upsets the boss I’m planning our business

Fixed costs divided by contribution per unit, well that is the solution To figure out the units you’re needin’ To make and sell ensuring you break even, even…….

Chorus So what I’ve been asked to do Is work out what we need in revenue To stop us from making a loss Because when we do it upsets the boss I’m planning our business I’m planning our busineeeeeeeeeeeessssssssss I’m planning our business

To work out exactly what the contribution is Take variable cost per unit in running your biz From the selling price you charge for your wares It goes towards covering your fixed costs…..

If you have been making a loss lately Its time to talk about the margin of safety Current output minus breakeven Make it positive and losses you’ll be leavin’… leavin’

Chorus So what I’ve been asked to do Is work out what we need in revenue To stop us from making a loss Because when we do it upsets the boss I’m planning our business I’m planning our busssssssssssssssiiiiinessssss I’m planning our business…..

Want to break even, oh-oh Want to break even…… MUSIC FADES OUT!

Bonus/Alternative Verses on Value of Break Even as a tool Now the break-even tool it has the bonus Of providing a target for business owners It’s simple to use and really concise Can model changes like raising your price

Not losing money anymore Making a profit is what I’m looking for Sales - they are always on our mind how many customers we must find, find….

Bonus Verses on Limitation of Break Even The break-even tool well it could be bad though Assumes things happen that may not work out, no Only as good as research quality Forgets what will happen in reality

Now Break Even comes with certain problems It’s based on taking some assumptions Like that you’ll sell all that you are making And let’s be honest that is just faking