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:
Dot Image
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 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.

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

Great! We have found the solution of this question!

Whatsapp Lisa