Answer:
Depicting a master budget:
|
Master Budget 2015
|
|
Particulars
|
Units
|
Amount
|
|
Sales Units
|
|
|
|
A
|
29,073
|
|
|
B
|
25,082
|
|
|
C
|
23,953
|
|
|
D
|
21,673
|
|
|
E
|
18,433
|
|
|
Total Sales units
|
118,215
|
|
|
Total sales value
|
|
1,182,150
|
|
Expenses
|
|
|
|
Wages
|
|
267,166
|
|
Wages On cost
|
|
68,801
|
|
Total Wages
|
|
335,967
|
|
Utilities
|
|
42,794
|
|
Stationery
|
|
30,972
|
|
Petty Cash
|
|
30,499
|
|
Consumables
|
|
30,027
|
|
Telephony
|
|
45,513
|
|
Total Variable Expenses
|
|
515,772
|
|
Fixed Expenses
|
|
|
|
Rent
|
|
254,000
|
|
Insurances
|
|
9,000
|
|
Depreciation
|
|
5,000
|
|
Legal
|
|
2,500
|
|
Total Fixed Expenses
|
|
270,500
|
|
Total Income
|
|
395,878
|
Creating breakeven point for the restaurant:
|
Particulars
|
Values
|
|
Sales
|
1,182,150
|
|
Variable cost
|
515,772
|
|
Contribution
|
666,378
|
|
Contribution margin ratio
|
56.37%
|
|
Fixed cost
|
270,500
|
|
Breakeven point in sales
|
479,865.18
|
Depicting the final budget for September 2015:
|
July - September 2015 Budget
|
|
Particulars
|
Units
|
Amount
|
|
Sales Units
|
|
|
|
A
|
5,815
|
|
|
B
|
5,016
|
|
|
C
|
4,791
|
|
|
D
|
4,335
|
|
|
E
|
3,687
|
|
|
Total Sales units
|
23,643
|
|
|
Total sales value
|
|
236,430
|
|
Expenses
|
|
|
|
Wages
|
|
53,433.18
|
|
Wages On cost
|
|
13,760.23
|
|
Total Wages
|
|
67,193.41
|
|
Utilities
|
|
8,558.77
|
|
Stationery
|
|
6,194.47
|
|
Petty Cash
|
|
6,099.89
|
|
Consumables
|
|
6,005.32
|
|
Telephony
|
|
9,102.56
|
|
Total Variable Expenses
|
|
103,154.41
|
|
Fixed Expenses
|
|
|
|
Rent
|
|
50,800
|
|
Insurances
|
|
1,800
|
|
Depreciation
|
|
1,000
|
|
Legal
|
|
500
|
|
Total Fixed Expenses
|
|
54,100
|
|
Total Income
|
|
79,175.59
|
Discussing the basis for the budget:
The overall budget is mainly conducted by using a 6.5% growth in all products that is been sold by the restaurant. This overall growth percentage mainly increases the total sales unit from 111,000 to 118,215 units. This increment in the overall Sales unit mainly helps in increasing the overall sales value and variable cost of the restaurant. The variable costs are mainly calculated based on the Rising CPI rate. In addition, the variable cost percentage is added with the CPI rate to get the adequate expenses, which is conducted by the restaurant. However, the fixed expenses are mainly kept same and no increase in CPI rate could increase the overall expenses. Therefore, after all the deduction from variable cost and fixed cost the profit that could be attained by the restaurant is 395,878 in 2015.
Moreover we break even point out the restaurant is mainly calculated by deducting sales from variable cost and dividing the contribution by the sales to obtain the contribution margin ratio. The fixed cost incurred by the restaurant is it divided by the contribution margin ratio to obtain the breakeven point in sales that need to be conducted. The restaurant without attaining breakeven sales cannot maintain continuity in their operations as it might reduce their overall capital involvement and hamper their growth. The restaurant mainly needs a sale amount of 479,865 for continuing its operations. Moreover, the overall profits of the company could be attaining more revenue from 479,865. Hennessy et al. (2017) mentioned that breakeven point mainly helps in identifying relevant sales that needs to be conducted by companies to increase their profitability.
Reference and Bibliography:
Hatch, M.D., Daniels, S.D., Glerum, K.M. and Higgins, L.D., 2017. The cost effectiveness of vancomycin for preventing infections after shoulder arthroplasty: a break-even analysis. Journal of shoulder and elbow surgery, 26(3), pp.472-477.
Hennessy, J., Hennessy, J., Meagher, E. and Meagher, E., 2017. Hohner Musikinstrumente GmbH & Co. KG: Break-Even Analysis. Kellogg School of Management Cases, pp.1-5.
Ngelambong, A., Kibat, S.A., Azmi, A., Nor, N.M. and Saien, S., 2016. An examination of guest dissatisfaction in budget hotel: a content analysis of guest review on TripAdvisor.
Subramanian, N., Gunasekaran, A. and Gao, Y., 2016. Innovative service satisfaction and customer promotion behaviour in the Chinese budget hotel: an empirical study. International Journal of Production Economics, 171, pp.201-210.
