# Break Even Project

Question # 00004890 Posted By: paul911 Updated on: 12/08/2013 12:38 AM Due on: 12/09/2013
Subject Accounting Topic Accounting Tutorials:
Question
PROJECT: The BREAK-EVEN Project is worth 20% of the total grade (or 200 points) in the class. For this project each student is to pull off of YahooFinance.com a full set so financials statement s (income statement, balance sheet and cash flow) for a company that they chose. Using the format should on the Break-Even Project Sheet they are to create a Break-Even Analysis for the company. The student is to identify whether they feel the company is a risky company (based on fixed costs) and how the company could improve they position. This should be no less than a 3 page paper.
Break Even Analysis
*Based on information from the 2005 Income Statement of Chipotle Company
*Break even sales is the total fixed costs added to the variable costs
Identification of Variable Costs
Cost of Revenues = \$511,621,000
Identification of Fixed Costs ( some assumptions were made)
Selling General and Administrative = \$51,964,000
Interest Expense = \$790,000
Others = \$28,026,000
Fixed Costs = \$80,780,000
1. Calculation of Contribution Margin
Revenues = \$627,695,000
Minus Variable Costs = \$511,621,000
Contribution Margin = \$116,074,000
2. Calculation of Break Even
Variable Cost = \$511,621,000
Fixed Costs = \$80,780,000
Break Even = \$592,401,000
*To take it one step further I will assume that revenues are generated primarily from burrito sales at \$5.60 each.
592,401,000/ 5.6 = 105,785,893
*I estimate that Chipotle needs to sell roughly 105,800,000 burritos to break even based on the information supplied.

Tutorials for this Question
1. ## Solution: Break Even Project

Tutorial # 00004681 Posted By: mac123 Posted on: 12/08/2013 12:39 AM
Puchased By: 2
Tutorial Preview
The solution of Break Even Project...
Attachments
break-even_project_cost_acct._0_.docx (16.34 KB)

Great! We have found the solution of this question!