Muhammed Samsuzzaman E mail: zaman. seoti2504@gmail Muhammed Samsuzzaman E mail: zaman.seoti2504@gmail.com Senior Teacher Kakoli High School School E mail: kakolihs@gmail.com Web address: www.kakolihighschool.com

Subject:Business Enterpreunership

Let’s watch the picture

What is your evaluation? Make profit

Today’s Lesson Profit Planning Analysis

If a seller sold a product at Tk. 50 If its cost is Tk. 40 Find out profit? Tk. 10

Profit = Sales price – Cost price Oppositely Loss = Cost – sales

1. Fixed cost 2. Variable cost Rent Material Salary Labor Insurance Factory OH

Contribution Margin per unit SP Sales price per unit VC Variable cost per unit CM Contribution Margin per unit

Lenovo company sold a product at Tk. 20 , its variable Cost per unit Tk. 12 and Fixed cost Total Tk. 20,000

Contribution Margin per unit SP Sales price per unit Tk. 20 VC Variable cost per unit Tk. 12 CM Contribution Margin per unit Tk. 8 CM SP VC = -

So we find that Tk. 8 is earn from one unit. It is not profit So we find that Tk. 8 is earn from one unit. It is not profit. Carefully think that we deduct only variable cost. Fixed cost totally denied. But we have to deduct fixed cost to find out actual profit . Fixed cost is Tk. 20,000 . How many units need to sale to cover this fixed cost Tk. 20,000?

Contribution margin per unit Tk 8 earn from 1 unit Tk 20,000 earn from __________ unit Yes! 2500 unit Tk. 20,000 Fixed cost Tk. 8 Contribution margin per unit

Contribution margin per unit Fixed cost Break even point = Contribution margin per unit

Income statement for 2500 unit Sales (2500X20) = 50,000 Less , Variable cost(2500 X 12) = 30,000 Contribution Margin = 20,000 Less , Fixed Cost = 20,000 Profit = 0 So, we found that Break Even Point (BEP) is a point where no profit and no loss.

60,000 50,000 40,000 30,000 20,000 10,000 Taka Variable cost Line Sales Line FC 0 500 1000 1500 2000 2500 3000 Unit

What is Break even point and Break even sales? Sales per unit Tk. 60 Variable per unit Tk. 40 , Fixed Cost Tk. 80,000 . What Is CM? What is Break even point and Break even sales? If the company wants to make profit Tk. 20,000. How many unit must be sold? Evaluation

CM = SALES PER UNIT – VARIABLE COST PER UNIT = 60 – 40 = 20 BEP = FC / CM per unit = 80,000 / 20 = 4000 unit. Break even sales = 4000 unit X 60 = 2,40,000. Target sale = ( FC + Desire Profit)/ CM per unit = (80,000+ 60,000) / 20 = 7,000 unit

Home work Optical company sold a unit at Tk. 100 , its variable Cost per unit Tk. 80 and Fixed cost Total Tk. 1,20,000. i) Find out BEP ? Ii) If The Company wants to make a Profit Tk. 60,000 how many unit must be sold? Iii) Draw a break even chart.

Thanks To All .

Sales Tk. 50 Cost Tk. 40 Profit Tk. 10 ?