PERISHABLES

AND BREAKEVEN
ANALYSIS
BY:
FRANCES VILLARIN
JEZYL ROSE TAGALOG
EVAN JOY PARAISO
GLORIE MAE WAYONG
 PERISHABLES
goods that rapidly spoils and perish
examples:
• Fruits
• Vegetables
• Pastries
 FORMULA
𝑻𝒐𝒕𝒂𝒍 𝑻𝒂𝒓𝒈𝒆𝒕 𝑺𝒂𝒍𝒆𝒔
Selling Price of Perishables=
𝑷𝒓𝒐𝒅𝒖𝒄𝒕𝒊𝒐𝒏−𝑺𝒑𝒐𝒊𝒍𝒂𝒈𝒆

Where,
Total Target Sales= Production x Initial Selling Price
Spoilage=Production x Rate of Spoilage
 EXAMPLE 1
Fe owns a company that manufactures batteries, based
on the report of past productions, 8% of the batteries
made are defective and cannot be sold. Fe’s production
team made 9500 batteries. It cost Php 14 to produce
one battery. If Fe wants a 35% mark-up on selling
price(margin), what should Fe price each battery to
make her target mark-up?
 SOLUTION
Rate Amount
Given:
Initial Selling Price: ? Cost 65% 14
Cost: 14 Markup 35%
Markup Rate: 35% based on selling price
Selling Price 100%
Total target sales: ?
Production: 9500 𝑃
Spoilage Rate: 8% B=
𝑅
Spoilage: ?
14
B= =21. 53846154
65

Therefore, the initial selling price is 12.54 pesos

Total Target Sales= Production x Initial Selling Price
=9500 x 21. 53846154
=204 615. 3846
Spoilage= production x Rate of Spoilage
= 9500 x 8%
= 9500 x 0.08
= 760
Given:
Initial Selling Price: 21.53846154
Cost: 14
Markup Rate: 35% based on selling price
Total target sales: 204 615.3846
Production: 9500
Spoilage Rate: 8% 𝑻𝒐𝒕𝒂𝒍 𝑻𝒂𝒓𝒈𝒆𝒍 𝑺𝒂𝒍𝒆𝒔
Selling Price of Perishables=
Spoilage: 760 𝑷𝒓𝒐𝒅𝒖𝒄𝒕𝒊𝒐𝒏−𝑺𝒑𝒐𝒊𝒍𝒂𝒈𝒆
𝟐𝟎𝟒 𝟔𝟏𝟓.𝟑𝟖𝟒𝟔
=
𝟗𝟓𝟎𝟎−𝟕𝟔𝟎
Selling Price of perishables=23.41137124
 BREAKEVEN
a point where the seller has covered all
expenses and costs of production but has not
made any profit or suffered any loss.
 FORMULA
𝑭𝒊𝒙𝒆𝒅 𝑪𝒐𝒔𝒕
Breakeven point=
𝑪𝒐𝒏𝒕𝒓𝒊𝒃𝒖𝒕𝒊𝒐𝒏 𝑴𝒂𝒓𝒈𝒊𝒏
Where,
Contribution Margin= Selling Price-Variable Cost
 EXAMPLE
Ronnie imports branded shirts from Los Angeles. He
buys each shirts at Php 125 each and sells it at Php
220 each. He also spends a total of Php 133 000 for
taxes, wages of distributors, rent of warehouse,
distribution and freight costs, etc. How many shirts
should Ronnie sell to be able to breakeven?
 SOLUTION
Given:
Variable Cost= 125
Contribution Margin= Selling Price-Variable Cost
Selling Price=220 =220-125
Fixed Cost= 133 000 =95

𝑭𝒊𝒙𝒆𝒅 𝑪𝒐𝒔𝒕
Breakeven=
𝑪𝒐𝒏𝒕𝒓𝒊𝒃𝒖𝒕𝒊𝒐𝒏 𝑴𝒂𝒓𝒈𝒊𝒏
𝟏𝟑𝟑 𝟎𝟎𝟎
=
𝟗𝟓
Breakeven= 1 400 shirts