5.4 Will you earn an income?

• Economie
• Middelbare school
• havo
• Leerjaar 3

Quick review

We still need the theory we learned in the previous sections.

Just a couple questions to see if we remember it...

Emily bought 70 shirts to sell in her new clothing shop.

1. Costs of goods sold
2. Operating costs

Justin paid the bill from the landlord, the rent of his shop was € 1200 this month

1. Costs of goods sold
2. Operating costs

Fire insurance premiums are...

1. Fixed costs
2. Variable costs

Packaging material costs are...

1. Fixed costs
2. Variable costs

A company's total costs is € 250,000 when they sell 10,000 products. Variable costs are € 7.50 apiece. Calculate the fixed costs of this company.

Robert gives the bank the assignment to transfer money to all employees on the 25th of each month

1. Housing costs
2. Selling/distribution costs
3. Costs of labour

Nellie pays the landlord €500 to fix a broken panel in her shop

1. Housing costs
2. Selling/distribution costs
3. Costs of labour

John wants an advertisment in the newspaper, it will cost him €75.

1. Housing costs
2. Selling/distribution costs
3. Costs of labour

John secured a loan of €300,000 for his enterprise. He has to pay 4.5% interest a year on the outstanding loan. He has to redeem the loan in 30 equal instalments. Calculate the amount of interest John has to pay in the first year.

A machine with a total purchase value of €200,000 has a salvage value, after six years, of €20,000. Calculate the yearly depreciation.

Discuss homework (5.3)

Q. 31, 32, 35, 37, 40 and 41

Question

Chapter 5

5.4 Will you earn an income?

 Income statement

Profit is an entrepreneur's income

An income statement is a statement of all revenue and costs over a certain period of time

Profit

• Gross profit is the difference between turnover and the costs of goods sold
• Net profit is the profit that is left after substracting all other costs

Gross profit = turnover - purchase value of items sold

Net profit = gross profit - operating expenses - all other costs

Break-even

Break-even point: the turnaround point where an entrepreneur goes from no profit to profit

Break-even sales: the amount of products an entrepreneur needs to sell in order to cover all the costs

Homework

Do Q. 45 - 53 from section 5.4