chosen product/service for term project (Strategic Marketing Plan), develop a financial plan for a 3-year period.

(the product is Baja instant Coffee)

This report will be marked as follows:

Packaging: 5 marks

Cover page, title page, referencing, etc. Contents: 40 marks

Assumptions underlying the projections of your financial plan The revenue projections Expenditure projections Profit/Loss Projections Break even analysis or contribution margin Communication (Grammar, Clarity of Writing, Spelling, etc.): 5 marks

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Guidelines for Break Even/Contribution Margin Analyses

At Breakeven (BE), Total Revenue (TR) = Total Variable Cost (TVC) + Total Fixed Cost (TFC)

At BE, TR = TVC+TFC

Unit break Even Volume = Total Fixed Cost

(Unit Selling Price-Unit Variable Cost)

(Denominator also known as contribution per unit)

Assume that Total Fixed Cost = SAR30,000

Then, Contribution Per Unit = Unit Selling Price- Unit Variable Cost

e.g.: SAR 5-SAR2 =SAR3

Therefore, Unit Break Even Volume =SAR30,000/SAR3= 10,000

So BE Revenue =10,000X5 = SAR50,000

NB: We shall discuss breakeven analysis into more details during the next lecture on Pricing. I will also upload a model on Break Even/Contribution Margin Analyses on the Black Board, under the Course contents. I advise that you review the Financial Plan in the sample Business Plan-1 attached (ACME Consulting)