Student

Determine the total number of units of products or services you realistically expect to sell each month in each department at the prices you expect to get. Use this step to create the projections to review your pricing practices.

What returns, allowances and markdowns can be expected?

Exclude any revenue that is not strictly related to the business

Cost of Sales

The key to calculating your costs of sales is that you do not overlook any costs that you have incurred. Calculate cost of sales of all products and services used to determine total net sales. Where stock is involved, do not overlook freight costs. Also include any direct labour.

Gross Profit

Subtract the total cost of sales from the total net sales to obtain gross profit.

Gross Profit Margin

The gross profit is expressed as a percentage of total sales (revenues). It is calculated by dividing

Gross profits

Total net sales.

Variable Expenses

Salary/Wages Base pay plus overtime

Payroll Expenses Include paid holidays, sick leave, Superannuation

Legal/Accounting Outside professional services.

Advertising Include desired sales volume and classified directory advertising expenses.

Motor Vehicles Include charges if personal car is used in business, including parking, tools, buying trips, etc.

Supplies Services and items purchased for use in the business.

Repairs & maintenance Regular maintenance and repair, including periodic large expenditures such as painting.

Outside service Include costs of subcontracts, overflow work and special or one-time services.

Fixed Expenses

Rent List