1. Group your fixed and variable costs
2. Calculate your break-even point in monthly sales
3. Determine your monthly sales needed to have a contribution margin of $10,000
4. Determine your net income/profit when you have a contribution margin of $10,000
5. Determine your margin of safety based on your monthly sales over the break-even sales.
Your new food service operation has the following expenses:
Salary $ 3,000.00 per month
Utilities $ 375.00 per month
Contract Services $ 575.00 per month
Advertising $ 190.00 per month
Rent $1,000.00 per month
Insurance $ 100.00 per month
Accounting and Legal fees $ 175.00 per month
Permits and Licenses $ 75.00 per month
Operating Supplies 10% of monthly sales
Hourly Wages 30% of monthly sales
Food Cost 25% of monthly sales