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ID number:525551
Evaluation:
Published: 20.09.2015.
Language: English
Level: College/University
Literature: n/a
References: Not used
Extract

Break-even Analysis
The Break-even Analysis gives the reader an idea of how many projects Renovation Expert UK must bid for, demolish, prep, paint and complete each month to cover costs. Because Renovation Expert UK is providing a customized service with many projects having unique requirements, the estimates of revenue and cost are somewhat arbitrary. Furthermore, the company experiences a high degree of seasonality in its contracts which may result in a number of unprofitable months during the late fall, winter and early spring periods. Fixed costs are based on running costs estimated by the officers of the company and include payroll for all employees. Variable costs are based on a 20% estimate of the average sales per unit, material cost and shipping. The average revenue estimate is based on the consensus of the principal officers who have had many years of experience in the industry and on the realistic assumption of the types of contracts the company will get in the beginning and the requirements needed to complete such projects.
Table: Break-even Analysis

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