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MBA Economics: Fast Food Revenue Analysis

This document contains an assignment submission for an economics course. It discusses the revenue, costs, and business plan for a proposed fast food restaurant called Chaska Fast Food. It defines key terms like revenue, explicit costs, implicit costs, variable costs, and fixed costs. It notes that initially Rs 5,102,250 was spent to start the business and the land requirement is around 2,000 square feet in a densely populated area. Main sources of revenue and types of costs are also outlined.

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waqasahm
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730 views9 pages

MBA Economics: Fast Food Revenue Analysis

This document contains an assignment submission for an economics course. It discusses the revenue, costs, and business plan for a proposed fast food restaurant called Chaska Fast Food. It defines key terms like revenue, explicit costs, implicit costs, variable costs, and fixed costs. It notes that initially Rs 5,102,250 was spent to start the business and the land requirement is around 2,000 square feet in a densely populated area. Main sources of revenue and types of costs are also outlined.

Uploaded by

waqasahm
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd

ASSIGNMENT

SUBMITTED TO Mr. YOUSAF BHATTI


SUBMITTED BY WAQAS AHMAD
SUBJECT ECONOMICS
PROGRAM MBA

TOPIC

RESTURENT CHASKA FAST FOOD


REVENUE

For a company, this is the total amount of money received by the company for
goods sold or services provided during a certain time period. It also includes all
net sales, exchange of assets; interest and any other increase in owner's equity
and is calculated before any expenses are subtracted. Net income can be
calculated by subtracting expenses from revenue. In terms of reporting revenue in
a company's financial statements, different companies consider revenue to be
received, or "recognized", different ways. For example, revenue could be
recognized when a deal is signed, when the money is received, when the services
are provided, or at other times. There are rules specifying when revenue should
be recognized in different situations for companies using different accounting
methods, such as cash basis and accrual basis.

EXPLICIT COST

Expense that is contractual in nature and definite in amount, such as rent, salaries,
wages, or utility bills. Explicit costs are easily recognizable for classification and
recording.

IMPLICIT COST

The costs associated with an action's tradeoff. It is related to explicit costs, which
represent the actual costs of an activity, and represents a cost that is not recorded
but instead implied. For example, an employee could take a vacation and travel.
The explicit costs would include travel expenses, the cost of a hotel room, and
costs related to entertainment. The implicit costs relate to the tradeoff, namely the
wages that the employee could have earned if the vacation was not taken.

VARIABLE COST

Periodic cost that varies, more or less, in step with the output or the sales revenue
of a firm. These include raw material, energy usage, labor (wages), distribution
costs, etc. Firms with high variable costs are significantly different from those
with high fixed costs. This difference affects the financial structure of the firm as
well as its pricing and profits.
FIXED COST

Periodic cost that remains (more or less) unchanged irrespective of the output
level or sales revenue of a firm, such as depreciation, insurance, interest, rent,
salaries, and wages. While, in practice, all costs vary over time and no cost is a
purely fixed cost, the concept of fixed costs is necessary in short-term cost
accounting.

PROJECT BRIEF

Fast food is food which is prepared and served quickly at outlets called fast-food
restaurants. It is a multi-billion dollar industry which continues to grow rapidly in
many countries. A fast-food restaurant is a restaurant characterized both by food
which is supplied quickly after ordering, and by minimal service. The food in
these restaurants is often cooked in bulk in advance and kept warm, or reheated
to order. Many fast-food restaurants are part of restaurant chains or franchise
operations, and standardized foodstuffs are shipped to each restaurant from
central locations.

Initially Rs 5,102,250 were spend to start the business

The land requirement is around 2,000 [Link]. in densely populated area


MAIN SOURCES OF REVENUE
[Link] COST

a. FIXED COST
Rent

The rent is Rs. 100,000/- per month. And Rs.


1,200,000 are given in advance before possession of premises.
VARIABLE COST:
IMPLICIT COST

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