Quote:
Originally Posted by Mugen EvOlutioN  lol they cant afford packs of sugars, so they set a employee off to 7-eleven to jack some sugars |
Actually, it's funny that you mention how they send employees to jack sugars from another company. This is actually an ingenious way of eliminating some cost overhead normally associated with operating a cafe style restaurant.
First, let's look at the definition of what an overhead expense is, then use this info to analyze the situation. Don't be afraid to take notes, or PM me if you have any questions.
Overhead Expenses
In business, overhead, overhead cost or overhead expense refers to an ongoing expense of operating a business. The term overhead is usually used to group expenses that are necessary to the continued functioning of the business, but do not directly generate profits.
Overhead expenses are all costs on the income statement except for direct labor and direct materials. Overhead expenses include accounting fees, advertising, depreciation, insurance, interest, legal fees, rent, repairs, supplies, taxes, telephone bills, travel and utilities costs.
Since nobody is picking up the cost for the sugar packets (they're almost always free in every restaurant), they are part of the overhead expenses. The business must pick up the cost of the sugar packets as part of its operational costs.
Now that we know what the operating cost is, let's look more closely at how this affects the profit margin.
Profit Margin 
The profit margin is mostly used for internal comparison. It is difficult to accurately compare the net profit ratio for different entities. Individual businesses' operating and financing arrangements vary so much that different entities are bound to have different levels of expenditure, so that comparison of one with another can have little meaning. A low profit margin indicates a low margin of safety: higher risk that a decline in sales will erase profits and result in a net loss.
At a particular level of output X, we can see that the optimal input combination for factor returns (r/w)E is given by KXE and LXE and for factor returns (r/w)F, we have KXF and LXF. Thus, as r/w falls, the optimal input combination for a given X involves an increase in K and a fall in L. By homogeneity of whatever degree of the production function, this would be true at every level of output, e.g. X and X¢ , thus we could draw two output expansion paths, the E path and the F path, corresponding to different levels of X where the E path refers to factor returns (r/w)E and the F path refers to the lower factor returns (r/w)F.
Using the output level of X, between the above two fiscal quarters, we can see a change relative to pricing of products (HK style food for silver towers case) and the profit margin within.
Now, with all of this set aside, according to the following website:
http://www.cw-usa.com/supplies-condi...kets-case.html
...if the average customer consumes 2 sugar packets (some people take no packets, others take up to 4, remember this is an average) per visit and silver tower see's about 450 people per day, that would mean 900 sugar packets are being used, PER DAY.
$14.95 / 2000 packets = X / 900 sugar packets
where X is the cost of sugar packets consumed by customers at silver tower, per day
to solve for X, remember we CROSS MULTIPLY!!
900 * 14.95 / 2000 = 6.7275
X = $6.73
So we know that the operating cost of silver towers sugar packets is $6.73 PER DAY!!!
That's equal to $201.90 PER MONTH
Which is basically $2422.80 PER YEAR!!
OMFG that's like a managers wage in a month for that place (taxes in). That's ALOT of money. If you think about the average term of a lease for a small business (5 years) thats a savings of $12,114. That's such an incredible way of saving money, especially in a time where money is scarce, and things start to get more expensive.
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