Question
Break-even point analysis Some businessmen is analyzing the effectiveness of opening the trade store with branded shoes. He knows that the store requires premises of
Break-even point analysis Some businessmen is analyzing the effectiveness of opening the trade store with branded shoes. He knows that the store requires premises of at least 110 m2 and to employ at least 3 employees. The price of the rent of premises will be 113 USD monthly for 1m2. The wage per one person will be 3 thousand USD monthly. Other maintenance expenses for the store (phone, service, security etc.) equals to 2 thousand USD monthly. Businessman is going to apply margin on sales at the level of 30% based on the purchased merchandise. The forecasted expenditures for the goods will amount to 150 thousand USD totally. He expects that the store will be opened on average 280 hours monthly. You are supposed to calculate:
a) Monthly sales revenues at which there is break-even point;
b) Monthly sales revenues at which the investment of 150 thousand USD will be reimbursed during 15 months.
c) The experience form the past shows that average bill being paid by the customers at such type of stores equals to around 100 USD. How many customers is supposed to buy at the store during average business hour as to the forecast of reimbursement of investment during 15 months will be realized.
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