|COURSE:Bachelor of Business / Bachelor of Accounting|
|Unit Title:||Cost Accounting|
|Type of Assessment:||Assessment 3 – Group Report (5 students in a group)|
|Length/Duration:||2,000 words (excluding executive summary, tableofcontent, heading & sub- heading, references, appendix & tables)|
Unit Learning Outcomes addressed:
|Assessment Task:||Group Presentation and Written Report|
Students are required to work in a group of 5 students for a presentation and a written report. Students must registerfortheirgroupwiththelecturerin week 4 and 5 and are not allowed to change groupmembers without the lecturer’s permission.
|3||Perform a break-even analysis for the proposed start-up business model.|
(A detailed procedure will be given in Part 3 online training course)
Each group is required to present their work through a presentation and a written report. The details are as follow:
Presentation (Presenting to investors)
Convince your potential investors so that they invest on your business model.
Requirements for presenting groups:
Requirements for participating groups:
The business model that gets the most of stickers will be awarded as the Best Business Model.
Each group is to write a business plan report including:
This report reveals the key implication of the business undertaken and other key issues which business would face in tis business. The business canvas model and balance score card have been assessed to evaluate whether the business incorporating would be viable decision or not. In the starting of this project, business canvas model and mission, vision of the company has been evaluated. After that, the implication of the business balance score card have been taken. The Break-even analysis has also been taken to assess the total costing and profit earning capacity of the organization. This shows the point at which the new startup will have no profit and no loss in its business.
Business description of the business idea
The Work Fit co-working Café is a new startup business which is started with the idea of providing a place to the business person, freelancer, scholars and event programmer. This startup also includes health services such as during the work hygienic and healthy food and in the morning and evening gym and yoga facility by the trainer. This will be the first start-up business that is providing all these services altogether. The company is planning to start a business in all metro cities with a view to provide the places accompanied with the gym and healthy café where people could find the right place to work and stay together in the solitude.
Business canvas model
The element in this start-up business has been discussed and pointed out with the business canvas model where the plan of start-up business has covered the key area that plays a significant role in business planning. The objective behind this business plan is to achieve the target of providing all these services and attracting the people to join it as the member.
Work Fit Café is starting its business from a city with the best services and looking forward to setting up the business units in every metro city. The business plan developed to provide the best services to the member of the Café who joins the café as a member by subscribing to the membership plan (basics, silver and golden) and avail the services according to their requirements. The company has to set its mission and to achieve it within the times.
The mission of the company can be as follows:
The Company can operate in the market when it is generating income or achieving its sales target. The heavy subscription will generate heavy revenue for the company so that it becomes easy for the company to offer the best services (Kangari, Farid, & Elgharib,2012).
If the company is getting the title of a healthy working culture then it makes easy for the company to advertise its service and fulfilling the small targets.
Total quality management is the approach which refers to the best services and product. This approach is followed from the lower level to the strategic level. Total refers to every stage of the management and quality refers to the best services and management refers to the planning. This is the continuous approach and to be achieved accordingly (Horrigan, 2015).
The company should set its price after determining the target cost because it is the first requirement of the company to achieve its break-even sales.
The user from the different sectors refers that the services are not product specific and user-specific. This is also the feedback on the services that they like the service provided by the company (Edmister, 2012).
The vision of the company can be as follows:
Every business goes through various life cycles but its ultimate objective is to achieve growth with upward direction and stability. The company has come with a new idea to settle its business in every different sector and provide them the unique facilities. After getting settled in one city, looking forward to promoting and expand the business to every state and city and also overseas by developing the franchise business (Zietsman, 2019).
As and when the business achieves its target then it is important to motivate its employees and other members by organizing the reward program and honouring them and offering the parties and celebration program every year-end and achieving the targets so that the member happily connected with the companies (Durante, & Turvani, 2018).
Missions and the targets are the subsets of the vision. The company when achieving all its targets and goals timely will facilitate it to achieve its vision objectives (Waters-Lynch, & Potts, 2017).
Balance Score Card
The Work Fit Café is a start-up business which is providing the working place, restaurants and fitness services to the different users. The company generating income is required to meet the cost which is of a fixed nature. The fixed expenditure is such as leasing, electricity, utility, permanent labor, rent and other overhead. If the company can generate such income or revenue that is enough to pay off the fixed expenditure, it indicates that the company is running on break even. The break-even point is calculated by dividing the fixed cost by contribution. Every company must reach its break-even point so that it can work accordingly and plan for a margin of safety. The margin of safety is the point where the company generates profit after paying off the fixed cost (Bouncken, Clauss, & Reuschl, 2016).
To analyze the break-even point, the company need to determine the following steps:-
Determination of contribution: - Contribution depicts the amount of revenue that is to be used to pay off the fixed cost and resulting in the profit or loss for the company. The calculated contribution will be used to calculate the break-even point for the company. As the break-even point is the situation where the company is not generating any income or loss, simply means no profit and loss point (Burns, & Dewhurst, 2016).
Computation of fixed cost: - fixed cost is the cost that does not change according to the change in the level of activity and which will occur whether the company is operating or not. To calculate the fixed cost, add up all the running costs of any business. This cost would include rent, salaries of non-production employees, insurance and mortgage (Waxman, 2017).
|Table to make chart|
|Unit||Fixed cost||variable cost||total cost||Sales|
|200|| $ 80,000.00 || $ 50,000.00 || $ 130,000.00 || $ 116,006.67 |
|250|| $ 80,000.00 || $ 30,000.00 || $ 125,000.00 || $ 135,000.00 |
|300|| $ 80,000.00 || $ 35,000.00 || $ 150,000.00 || $ 132,000.00 |
|350|| $ 80,000.00 || $ 40,000.00 || $ 175,000.00 || $ 135,000.00 |
|400|| $ 80,000.00 || $ 45,000.00 || $ 200,000.00 || $ 145,000.00 |
|450|| $ 80,000.00 || $ 50,000.00 || $ 225,000.00 || $ 180,000.00 |
|500|| $ 80,000.00 || $ 55,000.00 || $ 200,000.00 || $ 185,000.00 |
|550|| $ 80,000.00 || $ 60,000.00 || $ 180,000.00 || $ 250,000.00 |
|600|| $ 80,000.00 || $ 65,000.00 || $ 196,363.64 || $ 300,000.00 |
|650|| $ 80,000.00 || $ 70,000.00 || $ 212,727.27 || $ 325,000.00 |
|700|| $ 80,000.00 || $ 75,000.00 || $ 229,090.91 || $ 350,000.00 |
Break-even point – The break-even point is determined by using the total cost and total sales of the company (Chegut, & Langen, 2019).This point shows the point at which company would be having no profit and loss
This break-even point reveals that at 250 units company would be having no profit and no loss in its business process (Kangari, Farid, & Elgharib, 2012). Therefore, it could be inferred that if company wants to survive in this business industry, then it will first have to reach to the point at which it could sale its products and services at 550 points.
After assessing all the requirement and details of the newly business case, it could be inferred that newly set up business of Work Fit Life would be more beneficial for the business. However, the business activities and business canvas model undertaken for this work reveals that company needs to set up automation in its business process to lower down the business costing and strengthen the business outcomes. Now in the end, it could be inferred that proper business management financial management activities helps in operating the proper business plan. The financial plans attached helps in evaluating the financial outcomes and estimated financial data for the business.