Question: TWO ANSWERS ARE MENTIONED FOR THE QUESTION BELOW. EXPLAIN WHICH OF THE ANSWERS BELOW S THE RIGHT ONE AND WHY? PLEASE STATE THE REASON. Q:

TWO ANSWERS ARE MENTIONED FOR THE QUESTION BELOW. EXPLAIN WHICH OF THE ANSWERS BELOW S THE RIGHT ONE AND WHY? PLEASE STATE THE REASON.

Q: You opened a restaurant two months ago and observed the following demand in terms of the number of meals served and total cost for the two months of operation.

Month

Number of meals served

Total Cost (TL)

(fixed + variable)

1

2,000

30,000

2

3,000

35,000

The average revenue per customer for both months is 10 TL. Assuming that the fixed and unit variable costs are the same for both months, calculate the break-even quantity for your restaurant.

Ans A:

2,000V+F=30,000

3,000V+F=35,000

V=5, F=20,000

BEQ=20,000/(10-5)=4,000

Ans B:

Month

No. of meals served

Total cost (f+v)

1

2000

30000

2

3000

35000

5000

65000

Revenue = 10 TL per meal

Fixed cost = varoable cost

Total cost = Total sales = Break-even Point

Marginal cost ,

sales - variable cost = fixed cost (Profit / Loss)

sales = Profit/Loss

10 TL = profit

sales volume = 5000 10 TL = 50000 TL

Variable cost = Fixed cost = 50 % on sales

= 50000 ( 50/100 ) = 25000

Contribution = 50000-25000 TL

= 25000 TL

P/V ratio = (C/S) 100 = (25000/50000) 100

= 50 %

Break-even sales = Fixed cost / p/v ratio = variable cost = fixed cost

= 25000/ 50% = (25000/50) 100 =50000 TL

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