Custom Car Care, Ivey
Q.3 Break-even analysis
Cost analysis of Glenn’s custom car care for 1st year
|Fixed cost towards rent garage & office |$ 14400 |
|($ 1200 per month) | |
|Utilities ($ 100 per month) |$1200 |
|Telephone ($35 per month) |$420 |
|Advertisement- (yellow page 2inch*2 inch $996 + 6000 flyers cost $360) |$1356 |
|Insurance cost @ $100/month |$1200 |
|Total fixed cost |$18576 |
|Variable cost per unit |$20 |
|Contribution margin (return per unit-variable cost) |$80 |
|Return per unit $100 | |
|*Glenn’s nephew salary @ $60/day |$18780 |
No of car services at Break-even point = fixed cost Contribution margin per unit
QBEP is 232 or 116 days for Glenn, when he worked alone and given services to mid and low price group charging $100 per car wash.
Other alternatives and break-even
Cost analysis of Glenn’s custom car care for 1st year
|Fixed cost towards rent garage & office |$ 14400 |
|($ 1200 per month) | |
|Utilities ($ 100 per month) |$1200 |
|Telephone ($35 per month) |$420 |
|Advertisement- (yellow page 2inch*2 inch $996 + 6000 flyers cost $360) |$1356 |
|Insurance cost @ $100/month |$1200 |
|Total fixed cost |$18576 |
|Variable cost per unit |$20 |
|Contribution margin (return per unit-variable cost) |$80 |
|Return per unit $100 | |
|*Glenn’s nephew salary @ $60/day |$18780 |
No of car services at Break-even point = fixed cost Contribution margin per unit
QBEP is 232 or 116 days for Glenn, when he worked alone and given services to mid and low price group charging $100 per car wash.
Other alternatives and break-even