N4 Entrepreneurship & Business Management Conclusion


Sales scenarios can be very helpful when a business owner struggles to do an accurate forecast. Doing two different forecasts could help prepare the businessperson for different types of eventualities. For example, a pessimistic or worst case scenario over a longer period i.e. one year can serve as an early warning system alerting the owner in advance that the business in trouble.


Revision questions


1. You intend selling files to a stationery business. Your projected sales figure for the year is 3000 files. The files cost you R1 600. These files make up 40% of your sales and your selling price is R2 each. Your budgeted operating expenses for the year is: Telephone R150, Advertising R300, Postage R200, Stationery R100, Rental R1200, Other running expenses R50. 1.1 Calculate the variable costs and fixed costs. 1.2 Calculate the variable cost per file. 1.3 Calculate the gross profit percentage. 1.4 Calculate the break-even units if you want to achieve a profit of R800. 1.5 Use the information and construct a graphical representation of the break-even point. 1.6 What is the breakeven-point in units (files)?


2. You run a clothing business at the local flea-market, called Beach Wear. You sell clothing items for children and your two main products are T-shirts and sandals. The cost price for the T-shirts and sandals amounts to R12.00 and R20.00 respectively. You sell the T-shirts for R38.00 and the sandals for R48.00. Contribution to total sales of the T-shirts and sandals amount to 70% and 30% respectively. The fixed costs and variable costs per month amounts to R1200 and R1800 respectively. 2.1 Calculate the gross profit and gross profit percentage. 2.2 Calculate the weighted average gross profit percentage. 2.3 Calculate the break-even turnover if you want to achieve a profit of R2200 per month. 2.4 Describe and indicate a floor plan or layout of this business. Note, you are selling beach ware at a flea-market.


Other questions


Give one word for the following phrases. 1. Something that your business has if it is unique and which your competitors don’t have. 2. When a business is neither making a profit nor a loss, then the business is? 3. The costs a business needs to incur before it is open for business to generate an income. 4. Establish the size and number of customers in an area. 5. Taking a positive and a negative view of the potential future sales of a business. 6. The gross profit percentage for more than one product. 7. The profit after all fixed costs were deducted as well. 8. The turnover of a business


Click on the icon to complete a fun, interactive test that will review your knowledge.


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