Break Even Chart Worksheet (Page 2 of 2) in pdf

Break Even Chart Worksheet Page 2

2. The restaurant Gordon’s Gourmet has been very successful and needs to move to new

premises. This will increase the fixed costs but allow more meals to be served each day. At

the moment the fixed costs are £600 per month and the variable cost per meal is £6. A meal

at Gordon’s Gourmet costs on average £12. The business is open for an average of 20 days

per month for lunch and evening meals.

At the new premises, the variable cost and the price per meal will not change to begin with,

but the fixed costs will rise to £900 per month. The owner hopes however that the larger

premises will allow more customers to be served.

(a) For the original premises, what is the break-even point?

(b) Amend the chart to show the new fixed costs, FC

(d) Find the new break-even point.

(e) Show the change in profit on the graph when 1700 meals are served per month.

(f) It the output is 1700 meals per month, how has the margin of safety changed?

Break Even Chart Worksheet Page 2