Alibaba

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MAC Assignment -1

Assignment on Davey Brothers Case

Group -1

GROUP Members:

Shetty KshamaBalachandra (2016PGP356)

Sundaram  Pandey  (2016PGP392)

Saurabh Vats (2016PGP452)

Ritwik Moitra (2016PGP316)

Ansh Kathpalia (2016PGP061)

Surabhi Goswami (2016PGP398

Shagun Gupta(2016PGP350)

(a) Basic BE analysis:

 Break even calculation formula used: Fixed cost/ Contribution

 Contribution = Selling Price –Variable Cost

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(b) Breakeven at different pricing and price mix (Re 1, 0.75,0.5 and Mix 30:30:40)

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c) On borrowing from bank, effect on breakeven:

Interest rate offered by the bank is 15%[pic 4]

(d) On purchase of brand new machine (INR 50,000) impact on breakeven :

Assumptions:

(i) Economic life of the machine is taken as 10 years

(ii) Maintenance cost is taken as Rs 0 for the initial year

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e) Ravinder targets a profit of Rs 2000 per month, how many copies are to be sold at different price
        

Here breakeven is calculated as: (Fixed cost+ profit required)/ contribution

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(f) 60% of the copies are done on one page back to back and remaining on one side of the page. Break even based on paper consumption

        In this case for two sided copies tonner and power consumption will double

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(g) Ravinder managed business worth 60 copies per day priced at 75 paise per page, profit/loss incurred by him:
        Assumption: number of days in a year: 360 

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(h) If differential pricing is implemented, Re 1 for retail customers and Re 0.75 for institutional customer and institutional business accounts for 50% of total business, new breakeven

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(i) Ravinder offers doorstep service to institutional customers, cost incurred per visit is Rs 5 per day, and how do multiple cost drivers for variable cost affect the breakeven