break even/ partners

lgarside

Hi can someone tell me when you do a break even calculation does this include the drawings as expenses, or is it just looking at the main fixed costs like rent and electricity?

Also when a partner leaves or is sacked do they get to keep their company car or does this asset belong to the partnership??

mitch

Drowings are not fixed Cost and you can not include them in fixed cost, you just look at the main fixed cost:thumbup:

SandyHood

Hi can someone tell me when you do a break even calculation does this include the drawings as expenses, or is it just looking at the main fixed costs like rent and electricity?

lgarside

I know that mitch has already answered this question, so you may choose to not elaborate on what you want to know for. But, I'd like a little more information before I can give an answer.

Finding a break even point is important as it enables you to compare the level of business you need before you start making profits with the level you are expecting.
Assuming that you have been approached by someone considering starting a business, who would give up their job then the money they would be expecting from the business (for himself or herself) would be a fixed cost of the business. Afterall that is the minimum level of business needed to pay the fixed costs and his or her pay is one of those fixed costs.

Are you asking for a classroom based exercise, or for a particluar business related query?