01a.breakeven

01a.breakeven - MAC 2233/001-006 Business Calculus Fall...

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Unformatted text preview: MAC 2233/001-006 Business Calculus, Fall 2011 CRN: 81700–81702, 81705, 81716, 81715 Name: Two points . Professor : Stephen Suen Section: Peer Leaders : Hana Aboul-Hosn, Toni Jung, Renan Mendonca 1. Break-even Analysis . Revenue is income that a business receives from sales of goods and services. Cost of operating a business is the money needed to produce goods or rendering services to customers. The cost is usually the sum of the fixed cost and the variable cost. The fixed cost accounts for the overheads (rentals for store or equipment, phone bills), and the variable cost are charges (cost of raw materials for example) incurred in producing a unit of goods. A business is at the break-even point when the (accrued) operating profit equals the start up cost of the business. Example . Mrs. Rose starts a business selling pˆat´ e to friends and neighbors. She spends \$800 to buy equipment (food processor, pots and pans). She charges \$7 per serving. Her costs include \$100 fixed cost per month plus \$3 per serving. She estimates that she can sell 50 servings each month infixed cost per month plus \$3 per serving....
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