Breakeven
point and Marketing Budget
(Summary)
BREAKEVEN
POINT IN Doe�S CASE25% variable (within which some cost is FIXED, but it only exists
when there are sales) 50%
�fixed� variable ( in his case the set
up of his business requires marketing
to be present and fixed at all times and his cots from sales is a fixed percentage )25% net
profit
25% one
time investment (25 % of the Breakeven
Gross Income)
25%
(investment) + 25% (variable) + 50% (fixed variable) = 100%
$70,000��������������� + $70,000����������� + $140,000��� = $ 280,000
This means return
on investment.
___________________________________________________________
Once
investment is, at any given time, returned:
25%
(variable)�� + 50% (fixed variable) +
10% (advertising) + 15% (profit)
= 100%
$ 70,000������������ + $140,000���� + $28,000���������������� + $42, 0000���� = $280,000
Assuming that there
is no growth rate, a $ 42,000 + any amount that might come from variable will be realized as Net Profit.