What are sales revenue?
sales revenue is the amount of money that the company must earn from the sale to compensate for business costs. This includes materials, staff, processes and overhead costs. When the company earns more than the amount of sales sales, it shows a profit. If it earns less, the company's income for this period will be a loss. Break-Everyment Point is a place where these two amounts equal exactly.
An important function of determining sales sales is to help the company decide whether to be profitable product. If the sale seems too low, the company is unlikely to produce this item. For new businesses, break analysis is an important part of the business plan and helps show whether the company will be viable.
In order to determine the amount of income from the sale required by the company, it is necessary to analyze the balance. This process requires knowledge of the aversion per unit of selling price, the average per unit variable costs and the amount of average annual fixed costs. IfSome of these numbers are missing, it is impossible to determine the breakpoint for society.
Average annual fixed costs include business operating costs in general. These are expenditures that do not differ according to the amount of production, although there may be other reasons why these figures will differ from time to time, such as heating costs that change in winter. Typical fixed costs are to build rent and public services.
The selling price is usually determined by a number of different factors, but is generally based on market conditions and the sales price of competing products. It can fluctuate somewhat due to changes in prices, including factors such as sales or amounts of discounts. The use of the average price helps to stabilize the character, even if it changes.
Average variable cost per unit is the total cost incurred in the item production, taking into account factors that could fluctuate ifwill change the level of production. If the production increases the materials, it can cost less per unit due to the amount of discounts per raw materials. The opposite is also true, so if production reduces, the average cost of the unit is likely to be higher.
As soon as the data is set, sales from the decay market can first be calculated by dividing the diameter into a unit of variable costs for the average selling price per unit. Read the resulting number from one and then divide this number into an average annual fixed cost to determine the sales revenue. The sale of this amount brings profits and sales under this number lead to a loss.