Calculate the total cost of production for each product and the total fixed costs for the month Cost of production per product: Coffee: Cost per cup: Php 55 Monthly production: 1,500 cups Total cost = 55×1,500=82,500 Pastries: Cost per piece: Php 4.50 Monthly production: 1,200 pieces Total cost = 4.50×1,200=5,400 Sandwiches: Cost per piece: Php 17.50 Monthly production: 750 pieces Total cost = 17.50×750=13,125 Fixed costs: Rent and utilities = Php 2,500 Employee salaries = 8,000×2=16,000 Total fixed costs = 2,500+16,000=18,500 Compute the total revenue for each product before and after the market change Before market change: Coffee: Selling price per cup: Php 65 Monthly sales: 1,500 cups Revenue = 65×1,500=97,500 Pastries: Selling price per piece: Php 7 Monthly sales: 1,200 pieces Revenue = 7×1,200=8,400 Sandwiches: Selling price per piece: Php 20 Monthly sales: 750 pieces Revenue = 20×750=15,000 Total Revenue (Before market change) = 97,500 + 8,400 + 15,000 = Php 120,900 After market change: Coffee: Demand increases by 25% New sales = 1,500×1.25=1,875 cups Revenue = 65×1,875=121,875 Pastries: Demand decreases by 18% New sales = 1,200×0.82=984 pieces Revenue = 7×984=6,888 Sandwiches: Price reduced to Php 19 Revenue = 19×750=14,250 Total Revenue (After market change) = 121,875 + 6,888 + 14,250 = Php 143,013 Determine profit or loss for the café both before and after the market change Before market change: Profit = Total Revenue - (Total Variable Costs + Fixed Costs) Total Variable Costs = 82,500+5,400+13,125=101,025 Profit = 120,900−(101,025+18,500)=1,375 After market change: Profit = Total Revenue - (Total Variable Costs + Fixed Costs) New Variable Costs: Coffee: 55×1,875=103,125 Pastries: 4.50×984=4,428 Sandwiches: 17.50×750=13,125 Total Variable Costs = 103,125+4,428+13,125=120,678 Profit = 143,013−(120,678+18,500)=3,835 Calculate the break-even point for the café as a whole The break-even point is where: Break-even point = Fixed Cost / Profit Fixed Cost = 8000(2) + 2,500 = 18,500 Profit = (65-55) + (7-4.5) + (20 - 17.5) = 1233.33 Create business report based on the given calculations.
- Calculate the total cost of production for each product and the total fixed costs for the month
Cost of production per product:
Coffee:
Cost per cup: Php 55
Monthly production: 1,500 cups
Total cost = 55×1,500=82,500
Pastries:
Cost per piece: Php 4.50
Monthly production: 1,200 pieces
Total cost = 4.50×1,200=5,400
Sandwiches:
Cost per piece: Php 17.50
Monthly production: 750 pieces
Total cost = 17.50×750=13,125
Fixed costs:
Rent and utilities = Php 2,500
Employee salaries = 8,000×2=16,000
Total fixed costs = 2,500+16,000=18,500
- Compute the total revenue for each product before and after the market change
Before market change:
Coffee:
Selling price per cup: Php 65
Monthly sales: 1,500 cups
Revenue = 65×1,500=97,500
Pastries:
Selling price per piece: Php 7
Monthly sales: 1,200 pieces
Revenue = 7×1,200=8,400
Sandwiches:
Selling price per piece: Php 20
Monthly sales: 750 pieces
Revenue = 20×750=15,000
Total Revenue (Before market change) = 97,500 + 8,400 + 15,000 = Php 120,900
After market change:
Coffee: Demand increases by 25%
New sales = 1,500×1.25=1,875 cups
Revenue = 65×1,875=121,875
Pastries: Demand decreases by 18%
New sales = 1,200×0.82=984 pieces
Revenue = 7×984=6,888
Sandwiches: Price reduced to Php 19
Revenue = 19×750=14,250
Total Revenue (After market change) = 121,875 + 6,888 + 14,250 = Php 143,013
- Determine profit or loss for the café both before and after the market change
Before market change:
Profit = Total Revenue - (Total Variable Costs + Fixed Costs)
Total Variable Costs = 82,500+5,400+13,125=101,025
Profit = 120,900−(101,025+18,500)=1,375
After market change:
Profit = Total Revenue - (Total Variable Costs + Fixed Costs)
New Variable Costs:
Coffee: 55×1,875=103,125
Pastries: 4.50×984=4,428
Sandwiches: 17.50×750=13,125
Total Variable Costs = 103,125+4,428+13,125=120,678
Profit = 143,013−(120,678+18,500)=3,835
- Calculate the break-even point for the café as a whole
The break-even point is where:
Break-even point = Fixed Cost / Profit
Fixed Cost = 8000(2) + 2,500 = 18,500
Profit = (65-55) + (7-4.5) + (20 - 17.5) = 1233.33
Create business report based on the given calculations.
Step by step
Solved in 2 steps
