5.1 Turnover, costs and profit

• Economie
• Middelbare school
• vwo
• Leerjaar 3

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Program

1. Starting up

2. Start 5.1 explanation

3. Assignments

4. Second part explanation 5.1

5. Assignments 5.1

Lesson goals

You know what turnover, net profit and operating costs are and how these can be calculated

You understand what VAT stands for and you can calculate with the VAT

Chapter 5

The costs of a company

What do you think of when hearing costs?

Chapter 5.1

Turnover
Costs

Net profit

Fixed costs

Variable costs

Breakeven sales

Calculating the netprofit

Turnover = 12,000 X € 5	€ 60,000
Purchase value = 12,000 X € 2	€ 24,000 -
Gross profit	€ 36,000
Operating costs	€ 15,000 -
Net profit (or operating result)	€ 21,000

Turnover = 10,000 X € 5
Gross profit = € 20,000
Calculate the purchase value

1. € 70,000
2. € 40,000
3. € 30,000
4. € 20,000

Answer

Turnover = 10,000 X € 5

Gross profit = € 20,000

Calculate the purchase value

Turnover = 10,000 X € 5 = € 50,000

Purchase value                     .................  --> € 30,000

Gross profit                            € 20,000

Assignments

Complete assignments 1 t/m 7 on page 144 + 145

VAT = value added tax

VAT is a tax that a business has to pay (when buying inventory) or receives when selling products

The VAT needs to be transferred to the Tax Administration

Consumer price is including VAT, it is mostly 21%

VAT = value added tax

Sales price dinnertable      € 1,000

Purchase value                       €     400 -

Added value (gross profit)€      600 

VAT = 0.21 X € 600  = € 126   to be paid to the tax administration

Or:   € 1,000 X 0.21 = € 210 ---> to be paid

          € 400 X 0.21      €   84 ----> to claim

                                         € 126 to be paid to the tax administration

Consumer price including VAT =
€ 3,630. Calculate the price excluding VAT (21 %)

1. € 2,867,70
2. € 2,800
3. € 4,000
4. € 3,000

Answer

Sales price included VAT        € 3,630   121 %

VAT                                                                         21 %

Sales price excluded VAT       € ............. 100 %

€ 3,630/ 121 X 100 = € 3,000

Or faster: € 3,630/1.21 = € 3,000

Assignments

Complete assignments 8 + 9 

Done? Read the text on p. 147 and continue with assignment 10

Lesson goals

You know what turnover, net profit and operating costs are and how these can be calculated

You understand what VAT stands for and you can calculate with the VAT

Fixed and variable costs

Fixed costs = costs that do not depend on the number of products produced

Variable costs = costs that do depend on the number of products produced

At a volume of 10,000 products, the total costs are € 70,000
At a volume of 15,000 products the total costs are € 95,000
Calculate the variable costs per product

Answer

At a volume of 10,000 products, the total costs are € 70,000

At a volume of 15,000 products the total costs are € 95,000

Calculate the variable costs per product

Increase in costs/ increase in products

€ 25,000/ 5,000 = € 5

At a volume of 10,000 products, the total costs are € 70,000
At a volume of 15,000 products the total costs are € 95,000
Calculate the fixed costs

Answer

At a volume of 10,000 products, the total costs are € 70,000

At a volume of 15,000 products the total costs are € 95,000

Calculate the fixed costs

Variable costs: € 25,000/ 5,000 = € 5 per product

Total costs at 10,000 products                € 70,000

Variable costs 10,000 X € 5                       € 50,000 -

Fixed costs                                                       € 20,000

TC = 40 Q + 12,000
Calculate the total costs at a production volume of 6,000 products

Answer

TC = 40 Q + 12,000

Calculate the total costs at a production volume of 6,000 products

Variable costs 40 X 6,000 =€ 240,000

Fixed costs                                €     12,000 +

Total costs                                 € 252,000

Break even sales

If turnover is equal to all costs --> break-even turnover

Break even sales

Sales price cup of hot chocolate € 2

Variable costs per product € 0.50

Fixed costs € 120

Calculate the number of products you have to sell to break even:

€ 120/ (2 - 0.50) = 80 cups of chocolate