This right here is the two tables that we made for our company which fully accounts our costs, revenue and profits. This graph really makes everything about our costs and profits clear and we now understand how much we need to sell to make a profit.
- Accounting can easily be used to make better decisions. When you are completely aware of your costs and always keeping in mind that variable costs may change can allow you to make smarter investments. For example, Sharon wasn’t aware of the variable costs so she ended up paying a lot of money. Sometimes small start up businesses aren’t fully aware of all their investments which may lead to confusions when everything is counted. Therefore, keeping financial accounts will allow you to know how your company stands financially which may alter your decisions.
- Since we aren’t making the product ourselves, the only fixed cost we have are the actual wallets which we are purchasing for 150 pesos. According to the survey many people were willing to pay 400 pesos so that is what we decided to do. Buy for 150 sell for 400, giving us a 166% margin. Making it easy for us to make profit.