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Francesinhas and Breakeven

Barcarola is famous for its Francesinha, a typical dish in Porto. Some years ago, the company opened new restaurants, but opposed to the first restaurant which is located in a residential zone, the new restaurants are located in malls. How does the location affect the number of Francesinhas needed to be sold to cover the costs of cooking the dish? In other words, is it the Breakeven Point equal in the different restaurants? The Breakeven Point (quantity) is calculated dividing the fixed costs by the contribution margin of each Francesinha: BEQ = FC ÷ CMu. Assuming that Barcarola only produces Francesinha and for the different restaurants the cost of direct materials, direct labour and the number of Francesinhas sold are the same, it would be expected to assume that the breakeven point would be the same. However, there are other costs that affect both the fixed and variable costs. The rent of restaurants is for sure different and this would affect the fixed costs. On the other hand, we can assume that operating times can be different in the different restaurants and this may affect the period of cooking and consequently affect variable costs such us the electricity bill. Because of that, it is expected that the Breakeven Point should be different in the different restaurants.

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  1. MAC22 de janeiro de 2019 às 00:29

    Este comentário foi removido pelo autor.

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  2. MAC22 de janeiro de 2019 às 00:31

    Excellent reflection and application of a concept learnt in MAC. I also liked the graphic of your blog. Very nicely done.

    ResponderEliminar

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