Jane's Break-Even Case

In order for Jane to establish her Break-even for one month, she needs to identify and calculate the following Firstly, Jane needs to gather all her products with their Cost Price (Variable Cost per item) as well as her Selling Price. By identifying each products’ selling price and cost price, Jane can determine the difference – The Profit. This helps establish her fixed costs in which are referred to as the direct costs of production. This ensures how many need to be made and sold to cover all of Jane’s fixed costs. Therefore, once all the 3 costs have been identified – Fixed Costs, selling price per unit & Variable cost per unit – Jane must use the formula below to determine her break-even point: Break-even point=(Fixed Costs)/(Selling
This is because of the nature of the products being produced, the television units, the standard working hours differ from Funky Furniture to other companies. The nature of the product varies the working hours as the demand might fluctuate or decline, thus, longer working hours will be needed in order to complete the products at certain times such as the festive season (Christmas etc.)
Janes classifies the delivery of the individual units a direct cost as it may be included in the price the retailers pay, thus making it part of the service provided. In order for their main debtors (Home Stores) to be more interactive and remain a loyal client, it may be convenient to deliver to them with the costs being included in the initial price, therefore due to the nature of this product too, Jane’s classification ensures a better understanding and logical thinking to the prime
However, if the debtors are not happy, then they do not pay This means that Funky Furniture would need to pay the creditors straight from their bank account This is known as a negative flow of cash
This may be because Home Stores deal all their books using Excel All their other creditors may send their statements in Excel and it is convenient that it is all standardized. It may be cost effective to Home Stores, thus, makes their financial accounting processes easier. Since it is standardized, it may be easier for their shareholders and/or stakeholders to enlarge them, should they wish to inquire then.
Home Stores is a larger company and is Funky Furniture main source of income
Since it is a large contract, it comes with larger orders, thus, greater profits
Home Stores being a nationwide company have helped grow and develop Funky Furniture due to the “bulk-buying”.
By complying with Home Stores, it keeps good relations between retailer and supplier, therefore, constant disposable