Submitted by: Submitted by Oanh
Views: 124
Words: 718
Pages: 3
Category: Business and Industry
Date Submitted: 11/20/2013 12:26 PM
ESTIMATION OF SALES LEVELS, COSTS AND PROFIT – REVISION
‘al fresco’ sandwich bar – operates just down the road in Clerkenwell. ’al fresco’ is usually open 9-6pm Monday to Friday. It has a delivery service for order over £6 to the local area which operates by moped. It sells higher quality ‘made to order’ sandwiches and snacks at a ‘premium price’.
TASK ONE: Decide what sorts of costs these are. Some direct and indirect are debateable.
Cost | Fixed or variable? |
Mortgage on the property | |
Wages of 2.5 full-time staff | |
Electricity for heat & lighting of the premises etc | |
0.5 manager (50% of one workers time) | |
Electricity used in cooking | |
Bread, sandwich ingredients, coffee, tea, soft drinks | |
Bags and packaging materials | |
Telephone line rental | |
Telephone line charges | |
Furniture | |
Production of 10,000 publicity leaflets | |
Moped | |
Fuel for the moped | |
Accountants fees | |
Hourly paid extra staff employed at peak times | |
Premises insurance | |
Kitchen equipment | |
Business rates – tax paid to the council on premises | |
V.A.T. – the tax paid sandwiches eaten in the shop | |
Repayments of, and interest paid on bank loan | |
DRAWING A BREAK-EVEN CHART
‘al fresco’ sandwich bar has the following costs and revenues:
* The average sandwich price of a sandwich is £1.50
* Fixed costs per week are now £350
* Variable costs per sandwich are still £0.50
TASK TWO: Use the information above to complete the table below:
Output and profit/loss per week for the ‘al fresco’ sandwich bar (£)
Output | 0 | 100 | 200 | 300 | 400 | 500 | 600 | 700 |
Sales Revenue | | | | | | | | |
Fixed costs | | | | | | | | |
Total variable costs | | | | | | | |...