Theme 2 Section 7 Financhial Planning Flashcards
1
Q
Definition of sales forecast
A
A sales forecast is a prediction of the future sales volumes and sales revenue in the business
2
Q
Factors affecting sales forecast
A
1.consumer trend
2.economic variables=interest rates,inflation
3.actions of competitors
3
Q
Sales revenue calculation
A
Selling price x sales volume
4
Q
Total cost calculation
A
Fixed cost+variable cost
5
Q
Profit calculation
A
Total revenue-total cost
6
Q
Contribution per unit calculation
A
Selling price-variable cost per unit
7
Q
3 disadvantage of break even chart
A
Break even chart assumes variable cost gradually increases. Not true business may receive discounts
If one piece of data is incorrect it’s all wrong
It assumes there is not product wastage and it’s all sold
