Break even analysis, Mechanical Engineering

Assignment Help:

Break even analysis:

The costs from Shagun Palace, a continental restaurant, are shown below. Fixed costs are Rs. 50,000 per month.

2399_Break even analysis.png

Break even analysis is applied as applied for the single product case, with weights applied to each products according to the proportions of total sales.

1863_Break even analysis1.png

For example, the revenues for pizza are Rs. 700,000 which is 40% of the total revenue of Rs. 1,730,000. Hence the contribution of pizza is weighted by 0.40. The weighted contribution is 0.40 × 0.55 = 0.22. Therefore it reflects the relative contribution.

By using the approach we may find that the total weighted contribution is 0.517 for each rupee sales, and the break even point is

                                BEPR  = F / ∑ [(1- Vi/ Pi )] × (Wi )

BEPR = (50, 000 × 12) /0.517

= Rs. 1,160,550

The information simply implies total daily sales (52 weeks at 6 days each) of

1160550 /312 = Rs. 3720

The data given can be used to determine what must be sold each day. For example, the sale forecast of sandwich of 9% times the daily break even of Rs.3720 divided by the selling price of the sandwich (Rs.30), indicates that the sales must be

(0.09 × 3720)/30 = 11.16

Hence, the number of sandwiches should be sold per day is 11.


Related Discussions:- Break even analysis

Stitch welding, Stitch welding Here, a series of overlapping spot welds...

Stitch welding Here, a series of overlapping spot welds are made with the spot welding machine using the conventional electrode tip. Both water tight and gas tight joints can b

Standard for steel pipes, Q. Standard for steel pipes? Vendor shall mee...

Q. Standard for steel pipes? Vendor shall meet or exceed the requirements of the latest edition of the following codes, regulations, and standards except as superseded herein.

Two wheeler engines, Two Wheeler Engines: Engine is a unit of motorcycle t...

Two Wheeler Engines: Engine is a unit of motorcycle that runs the motorcycle by converting fuel energy to mechanical power. This power comes from the burning of fuel inside the cy

Principal planes and principal stresses, Principal Planes and Principal Str...

Principal Planes and Principal Stresses: Define the Principal Planes and Principal Stresses. Sol.: When an element in strained body is under action of plane stresses, it i

Estimating time, estimating time of boring, turning,milling?

estimating time of boring, turning,milling?

Illustrate governing mechanism of francis turbine, (a) Illustrate governing...

(a) Illustrate governing Mechanism of Francis turbine. (b) Derive a mathematical expression for work done and efficiency of Francis runner. (c) Write differences between Kapl

Write the types and functions of column, Write the types and functions of c...

Write the types and functions of column. a) Explain surveying. Brie?y describe about the chain and accessories

Describe about water disposal system, Q. Describe about Water disposal syst...

Q. Describe about Water disposal system? Disposal water from the Evaporator Package is cooled down to 50°C by the Disposal Cooler and is sent to Disposal Water Tank(s). Disp

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd