MATH REPORT

SUBMITTED TO SIR: ABDULLAH

Fantastic six

• HUZAIFA TARIQ (4107)

• ISTABRAQ ALIES MOOMAL (4160)

• MUHAMMAD WASIF ALI KHAN (4124)

• SYED MUHAMMAD UZAIR ABID (4152)

• MUHAMMAD TAHA SHAMIM (4590)

• ROOMAN MUHAMMAD KHAN (4615)

INTRODUCTION OF ICEBAR

The ICEBAR has started their business on 16th Feb 2009. This is a family business which is owned by four partner. They all are equally partner in this organization.

Owner`s has also a factory of ice cream namely “PICINIC FOODS”. They also take order for marriages, parties, picnic etc.

They are running their factory from 25 to 30 years. They are one of the largest supplier in ice cream market.

Owner usually spent their most of the time in ICE BAR rather than their factory. The owner comes to shop at 06:30 approximately.

There are currently two employees in their organization and their equal income is 17000/=

The Picnic Foods is very famous in Mawa Matka Kulfi.

The product of ICE BAR are: Cones, Ice cream shakes, Kulfi, Faluda, cold coffee, etc

INTRODUCTION OF ICEBAR

Executive summary

• At the time of starting business their investment and expenses

250,000/= for machine, 50,000/= for generator,

200,000/= for furniture, 35,000/= on rent expense ,

26,000/= for shop expense 17,000/= for wages

• The cost of 10 litres ice cream is 1,500/= and gets 70 scoops on 10 litres.

• The price of scoops is 30/= per scoops.

• ICE BAR sells 160 scoops on normal days.

• The sells of chocolate flavor is 50% while sells of strawberry is 30% and vanilla is 20%.

Description

• Revenue

• Total revenue

• Variable cost

• Fixed cost

• Total cost

• Profit

• Break-even

• Product mix

• Make or buy decision

Revenue :Price of 1 scoop = 30/=

Revenue = Price*Quantity = 30xX

TOTAL REVENUE:Total revenue = 30X

Variable cost per scoops :Cost of 10 litres ice cream =1,500/=

Scoops on 10 litres 70 scoops 1,500

70 21.42

21.5/= per Scoops

Variable cost per scoops :Variable cost per scoops = 21.5X/=Fixed cost:

Rent expense = 35,000/=Shop expense = 26,000 /=Employees wages expense = 17,000/=Total Fixed cost = 78,000/=TOTAL cost:Variable Cost + Fixed Cost = Total Cost 21.5X + 78,000 = Total Cost

Profit :Total Revenue - Total Cost =Profit

Total revenue =30X

Total Cost =21.5X+78,00030X-(21.5X+78,000) 30X-21.5X-78,000 8.5X-78,000

Profit = 8.5X-78,000

Break-even:Break-even = Fixed cost

price-variable cost

= 78,000

30-21.5

= 78,000

8.5

= 9176.4

= 9176.4 scoops

Product mix:The sells of chocolate flavor is 50% while sells

of strawberry is 30% and vanilla is 20%.

Flavors Quantity Profit Margin / Scoop(Price – V.C)

Total Profit Margin

Chocolate 5 8.5 42.5

Strawberry 3 8.5 25.5

vanilla 2 8.5 17

Total = 85

Break-even = Fixed cost

contribution margin

= 78,000

85

= 917.64

Chocolate = 917.64 * 5 = 4588.2

Strawberry = 917.64 * 3 = 2752.92

Vanilla = 917.64 * 2 = 1835.28

Buy or make decision:He is the great manufacturer of ice cream that`s

why he should have to preferred the make decision. He is the market leader in ice cream market in that particular area because he has the power of taste.