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

Governors, The spring controlled governor of the Hartung type has two rotat...

The spring controlled governor of the Hartung type has two rotating masses each of 2.5kg and the limits of their radius of rotation are 100 mm and 125 mm. The each mass is directl

Compund cylinders, A compound cylinder is made by shrinkage one cylinder of...

A compound cylinder is made by shrinkage one cylinder of 120 mm external diameter and 20 mm wall thickness. The shrinkage allowance , based on radius , is 0.025 mm. If both cylinde

Determine magnitude of greatest shear stress, At a point in a rectangular b...

At a point in a rectangular block of elastic material under strain, there is a tensile stress of 50MPa on one plane and a compressive stress of 30 MPa on a plane at right angles. T

Explain the study of readial drilling machine with spindle, Explain the stu...

Explain the study of readial Drilling machine with spindle The objective of this study is to study of readial Drilling machine with spindle. As in Radial Drilling machine th

What is the full form of step, What is STEP The STEP (Standard for Exte...

What is STEP The STEP (Standard for External Representation of Product Data) project is supported by the ISO workgroup TC 184/SC4. it is also sometimes called Standard for Exch

Properties of plastic, Q. Properties of plastic? Their great variety of...

Q. Properties of plastic? Their great variety of physico- chemical and mechanical properties, and ease with they can be made into various articles have found plastic their wide

Motion of connected bodies, Motion of connected bodies: Analyze motio...

Motion of connected bodies: Analyze motion of connected bodies that is connected by pulleys. Sol: The given figure shows a light and inextensible string passing over sm

Metal cutting, what is tangential force in metal cutting

what is tangential force in metal cutting

#, parameters in designing a presure vessels

parameters in designing a presure vessels

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