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Compose a 1750 words essay on Burgertown Report. Needs to be plagiarism free!Download file to see previous pages... 1.2312Staff Cost1276640.7494.952Total Variable Cost406.952Marginal Contribution26000
Compose a 1750 words essay on Burgertown Report. Needs to be plagiarism free!
Download file to see previous pages...1.2
312
Staff Cost
127664
0.74
94.952
Total Variable Cost
406.952
Marginal Contribution
260000
0.00
295.048
Fixed Cost
83
Depreciation Cost
25
Total Fixed Cost
108
Profit Before Interest
187.048
&. Tax (PBIT)
Interest
30
12% on Rs. 250000
Profit Before Tax (PBT)
157.048
c) Break Even Point
Fixed Cost / Marginal Contribution
95170.96
Per Unit
As you can see above that by producing 95,170.96 units the total sales realized would be equal to the total cost and thus the firm would be under Break Even situation meaning thereby that they would be a no profit no loss situation.
d) Margin of Safety
Actual Sales - Break Even Sales
164829
(in volumes)
The Firm is in a better situation as the Margin of Safety is in a much strong position both in terms of quantity as shown above and in percentage as shown below :
= Margin of Safety / Total Sales * 100
164829 / 260000 * 100 = 63.40%
f) No. of units to be produced extra to gain additional profit of Rs. 50,000
PARTICULARS
No. of Units
Rate
Value
Sales
x
2.90
2.90x
Variable
Cost
Cost of Meals
x
1.2
1.2x
Staff Cost
x
0.74
0.74x
Total Variable Cost
x
1.94x
Marginal Contribution
0.96x
(Sales - Total Variable Cost)
Fixed Cost (Break up given below)
173000
Depreciation Cost
25000
Total Fixed Cost
198000
Profit Before Interest
237048
&. Tax (PBIT)
(Stated that the profits would be
50,000 additional than the earlier profits
Also Marginal Contribution = Fixed Cost + Profit Before Interest &. Tax
Therefore no. of units produced to achieve an additional profit of Rs. 50,000 would be
(237048+198000) /...
Some limitations are typically due to the lack of precision in the numbers (e.g., what is the actual price, is it purchase price or life cycle price) and getting the precise figures for fixed and variable costs. Beyond that, it is limited by its total focus on the quantitative elements of a business plan and doesn't consider competitive reactions, customer needs, etc.
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