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From experience you are sure that you need to add 12% of variable cost as a waste allowance cost for all items. You estimate labour cost to be 500 (5 counters with 2 people each). Even if nothing is sold, your labour cost will be 500 rupees. Counter rental, which is a contractual cost at 100 rupees for each counter per day. Compute the breakeven point in rupees per day. How many Butterscotch Ice creams would you expect to sell at the BEP?

From experience you are sure that you need to add 12% of variable cost as a waste allowance cost for all items. You estimate labour cost to be 500 (5 counters with 2 people each). Even if nothing is sold, your labour cost will be 500 rupees. Counter rental, which is a contractual cost at 100 rupees for each counter per day. Compute the breakeven point in rupees per day. How many Butterscotch Ice creams would you expect to sell at the BEP?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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As a owner of a small ice-cream shop you need to plan for stocks of different ice-creams based on the following details: Item Selling Price (in rupees) Variable Cost (in rupees) % of Revenue *12 27 10 Strawberry Butterscotch 215 28 40 Chocolate *10 23 30 Vanilla ₹8 #2 20 From experience you are sure that you need to add 12% of variable cost as a waste allowance cost for all items. You estimate labour cost to be 500 (5 counters with 2 people each). Even if nothing is sold, your labour cost will be 500 rupees. Counter rental, which is a contractual cost at 100 rupees for each counter per day. Compute the breakeven point in rupees per day. How many Butterscotch ice creams would you expect to sell at the BEP?
Transcribed Image Text:As a owner of a small ice-cream shop you need to plan for stocks of different ice-creams based on the following details: Item Selling Price (in rupees) Variable Cost (in rupees) % of Revenue *12 27 10 Strawberry Butterscotch 215 28 40 Chocolate *10 23 30 Vanilla ₹8 #2 20 From experience you are sure that you need to add 12% of variable cost as a waste allowance cost for all items. You estimate labour cost to be 500 (5 counters with 2 people each). Even if nothing is sold, your labour cost will be 500 rupees. Counter rental, which is a contractual cost at 100 rupees for each counter per day. Compute the breakeven point in rupees per day. How many Butterscotch ice creams would you expect to sell at the BEP?
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