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Hello
I am working in the retail industry ( Grocery supermarket ) with more than 3000 item selling
I like to calculate the break-even point for our company
Pls guide me if you can
Can we consider the cost price of the item as a variable cost?
We have all types of expenses such as depreciation, Right of use depreciation, Staff cost, Utilities & General and administration cost which I think all would be fixed cost
I have a report giving me the quantity sold per item over the month with sales price and the cost price
So I can use it to calculate the contribution margin per item by subtracting ( sales price – cost price )
pls guideI’ll try to answer this in parts because I think I will have to give this a bit of thought. Please don’t use non cash expenses such as depreciation in your calculation. Also I am unconvinced that in the business you describe that this is the best technique to give useful and actionable information. I would suggest return per unit of shelf space over time would be one useful measure which could be used. After doing this decisions could be made about how much more or less shelf space might be devoted to particular products. Please ask if you want further information. Hope this helps.
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