CMA ASSIGNMENT

Group No. 7
Alisa Anil- UR21005
Priyam Mrig- UR21036
Ritvik Kashyap- UR21043
Siddharth Durvasula- UR21054

CVP analysis and break-even calculation of a product

Company- Nissin foods
Product- Top Ramen
Here we will look for the cost involved in the production of Top Ramen noodles. Then we’ll
compare it with the total sales to find out the minimum efficiency at which the plant should
operate in order to have a neither loss nor profit relation.
Fixed Cost
A. Land and building
Particulars Area (sq. mtrs) Cost (Rs)
Land 150 60,000
Building 75 2,50,000
Total 3,20,000

B. Plant and machinery

Item Quantity Price (Rs)

Extrusion Machine 1 100000
Mixer 1 80000
Pre-conditioner 1 100000
Packaging 1 100000
Weighing 1 10000
Total 390000

C. Miscellaneous Assets- Rs 50,000

D. Utilities- 1,10,000
Variable cost
 A. Manpower requirements

B. Raw Material and packaging

Product Qty Price/Ton Value

Raw Material 100 70,000 70,00,000
Packaging 100 Rs 20,000/Ton of 20,00,000
Material finished goods
Total 90,00,000

C. Selling expenses- 30% of total sales

Final Total Cost Analysis

Fixed Cost In Rupees
Land & Building 310000
Plant & Machinery 390000
Miscellaneous Assets 50000
Utilities 110000
Total Fixed Cost 860000
Total Variable Cost Per ton of production
Manpower Requirements 24000
Raw and packaging material 90000
Selling expense @30% of total sales

Break Even Quantity

860000+ (114000*X) +(30/100) *X*1000*180=(180*X*1000)
Particulars Numbers Salary Total salary
Machine operators 2 4000 8000
Skilled workers 2 3000 6000
Semi-skilled 2 2000 4000
workers
Helpers 2 1000 2000
Salesman 2 2000 4000
Total 24000
860000= (180000-114000-54000) *X
X=71.66 ton
Conclusion
The plant must operate at the minimum efficiency of 71.66% in order to reach break-even
analysis point i.e., not to suffer any loss.

Sales by Value
Projected value= Rs 8611.1 million
Desired market share= 80%
Projected value of sales needs to be 80%× 8611.1= Rs 6888.88 million.
Average retail price = Rs 9
Price for 1000 ton of Top ramen = 9×10^7 rupees.
Projected value of sales= Rs 6888.88 million
Projected volume sales= (Projected value of sales/ Price per thousand tons) = 76.5 thousand
tons
Projected category sales= 100 thousand per tons.
Total market volume share of Top ramen= 76.5 tons.

Contribution margin= Total revenue- Total Variable Cost

= Rs 68,88,88,000 - Rs 2,40,00,000
=Rs 57,48,88,000

Contribution margin %= Contribution Margin/ Sales * 100

=57,48,88,000/68,88,88,000*100
= 83.48%