Purchase Solution

Accounting: Breaking Even

Not what you're looking for?

Ask Custom Question

1. Group your fixed and variable costs
2. Calculate your break-even point in monthly sales
3. Determine your monthly sales needed to have a contribution margin of $10,000
4. Determine your net income/profit when you have a contribution margin of $10,000
5. Determine your margin of safety based on your monthly sales over the break-even sales.

Your new food service operation has the following expenses:

Salary $ 3,000.00 per month

Utilities $ 375.00 per month

Contract Services $ 575.00 per month

Advertising $ 190.00 per month

Rent $1,000.00 per month

Insurance $ 100.00 per month

Accounting and Legal fees $ 175.00 per month

Permits and Licenses $ 75.00 per month

Operating Supplies 10% of monthly sales

Hourly Wages 30% of monthly sales

Food Cost 25% of monthly sales

Purchase this Solution
Solution Summary

The problem set deals with questions under accounting: break-even estimation.

Solution Preview

Application of Financial Concepts I: Show and explain your work. Save as an Excel file
Your new food service operation has the following expenses:
Element Amount/Month
Salary $3,000
Utilities $375
Contract services $575
Advertising $190
Rent $1,000
Insurance $100
Accounting and legal fees $175
Permits and licenses $75
Operating supplies 10% of monthly sales
Hourly wages 30% of monthly sales
Food cost 25% of monthly sales

1. Group your fixed and variable ...

Solution provided by:
Chidi Ngene, M. Sc.
Education
  • B. Sc., University of Nigeria
  • M. Sc., London South Bank University
Recent Feedback
  • "Thank you."
  • "thank you Chidi Ngene.. if you have any APA references would be great"
  • "Thank you so much for your help, your explanations were easy to understand and apply!"
  • "are you able to highlight the equations used either on the xlsx or a word doc as to how each graph was formed- overall looks fine i just need help understanding this myself"
  • "Chidi Ngene, M. Sc. Was extremely helpful as without the help and guidance I would have failed, but with the help I passed. I still have a lot to learn and in need of the guidance to understand and learn more on the subject. I would recommend Chidi Ngene and BrainMass to anyone that are in need of help. Thank you!!"
Purchase this Solution
Free BrainMass Quizzes
Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

Operations Management

This quiz tests a student's knowledge about Operations Management

Transformational Leadership

This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.

MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

View More Free Quizzes
Related BrainMass Solutions

  • Brief of Arthur Anderson LLP v. United States

    In Andersen's defense motion, the accounting firm claimed that the charge by the Texas Jury of obstruction of justice was not an accurate portrayal of the actual law that they were charged with breaking.

  • Integral Life Sciences: What is the breakeven price on Stock

    To what price must the stock go for the warrant purchaser to at least be assured of breaking even?

  • Cost Behavior and Break-even Analyses

    What will be the break-even point in dollar sales for 2011 if the company spends the additional RM20,000? iii) "Break-even analysis is of limited use to management because a company cannot survive by just breaking even." Do you agree? Explain.

  • Discussing the concept of breaking even

    412326 Discussing the concept of breaking even We hear a lot from those we know in business, from our studies, or from the news the words "break even".

  • Financial Accounting : Return on Investment

    Although they would be just breaking even with this amount. They would need to charge some more in order to make a profit of course!!! Hope this helps. A return on investment problem is solved and explained.

  • Ethics Compliance Program: A&A Accounting

    278540 Ethics Compliance Program: A&A Accounting For the last six months, Jill has been with A&A Accounting, a multi-billion dollar entity.

  • How Breaking Even Might Be A Good Business Decision

    191986 How Breaking Even Might Be A Good Business Decision The chapter stresses the need to recover the full cost of capital for future endeavors. Can you think of an instance when "breaking even" would be a good business decision?

  • Demand Function

    Find the largest quantity the firm can produce consistent with: i)breaking even: ii)making profits of 9232: iii)making a loss of 245. Please see the attached file.

  • Solving Questions on Descriptive Statistics

    Office of Management and Budget (OMB) requires government agencies to produce annual performance and accounting reports (PARS) each year.

View More Related Solutions