2.
Big chicken is a food joint specializing in chicken items
such fried chicken, chicken pop corn, chicken lollipop,
chicken wings and chicken boneless strips.
One can find the mixture of KFC, McDonald, and
Subway items in their menu.
The outlet where I have done my survey is located in
kammanahalli main road.
Lubala Joe
3.
Rent ₨ 75.000
Machineries ₨ 300.000
Salary ₨ 63.000
Electricity bill ₨ 40.000
Water bill ₨ 5.000
Transport Rs80.000
Plates Rs4.500
Lubala Joe
Total fixed cost ₨5,67,500
5.
Total variable cost 14450*30= ₨4,33,500
Total cost = variable cost + fixed cost
5,67,500 + 4,33,500 = ₨1,01,000
Total revenue = price unit * quantity, so the quantity is not given.
Quantity= ?
Price per unit= ₨160
Total revenues ₨50,000 per day
Quantity produced per day = Total revenue =50,000= 312.5 units
Price per unit 160
Lubala Joe
6. Break even point= TFC/( S.U.P –V.C.U.P)
TFC= Total fixed cost
S.U.P= Sale per unit of production
V.C.U.P= Variable cost per unit of production
B.E.P= 5,67,500/(160-50)= 5,159 units per month
Lubala Joe
7.
To reach the break even point they have to sale 5,159
units per month. Knowing that their daily units produced
is 312, so, to find their contribution margin which the
extra sales of the month after reaching their break even
point.
To know in how many days they reach the break even I
divided the break even point with the daily production.
5,159= 16days
312
Lubala Joe
8. So that means they have 14 days of extra sales. To
know how many extra units they sale, I multiplied the
daily units in to the extra days of sales.
=312 units per day * 14days =4,368 units
This is considered as the margin of safety.
Lubala Joe
