Two Hundred Samosas and a Rainy Sports Day
A group of six Class XII students runs a snack stall during their school's annual sports day in Salem. They prepare 200 samosas at an ingredient cost of ₹8 each. The club lends them ₹400 for stall rent, and they spend ₹200 on gas and transport plus ₹150 on a printed banner, all counted as costs for the day. They fix the selling price at ₹15 per samosa. Rain arrives at 2 p.m., the crowd thins, and the day closes with 170 samosas sold and 10 given free to the volunteers; 20 are left over. The club wants its ₹400 back immediately. One student, Ravi, argues they should double production to 300 samosas for the next event because 'we sold almost everything and demand is clearly high'. Another says the stall made a loss and they should stop.
1. Calculate total cost, revenue and profit, then work out the break-even quantity. Show why the textbook break-even is optimistic here.
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Cost: ingredients 200 × ₹8 = ₹1,600; plus rent ₹400, gas and transport ₹200, banner ₹150, giving ₹2,350. Revenue: 170 × ₹15 = ₹2,550. Profit = ₹2,550 − ₹2,350 = ₹200, a margin of 200 ÷ 2,550 ≈ 7.8%. The stall did not make a loss.
On paper: contribution per samosa = 15 − 8 = ₹7; fixed costs = 400 + 200 + 150 = ₹750; 750 ÷ 7 = 107.1, so 108 samosas must be sold. Check: 108 × 7 = ₹756, which covers ₹750.
But that assumes everything made is sold. Here 40 of 200 (20%) earned nothing, so each sold samosa also had to carry ₹8 of wasted ingredient: effective contribution = 15 − 8 × (200 ÷ 170) ≈ ₹5.59, giving a truer break-even of about 134 sold. They cleared it, but barely - which is exactly why Ravi's reading of 'demand is clearly high' is unsafe.
2. Should the group scale to 300 samosas next time? Give a reasoned recommendation with conditions.
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No, not on this evidence. At the same 20% waste pattern, 300 samosas means about 60 unsold or given away, costing 60 × ₹8 = ₹480 in ingredients alone - more than two days of the ₹200 profit they actually made. Fixed costs may also rise with a bigger stall and a second banner.
Conditions before scaling: take pre-orders with a ₹5 token in the morning so production follows confirmed demand; cook in two batches of 150 and start the second only if the first sells out by noon; keep a rain plan, such as a covered counter or a non-perishable item; and reuse the banner instead of spending ₹150 again. A leftover plan matters too - discount to ₹10 in the final hour rather than giving away free.
Scaling is a decision about risk, not only about queue length. One wet afternoon at 300 units would wipe out several events' earnings.
3. Identify two entrepreneurial traits the group showed and two it lacked, and suggest one risk-reduction method grounded in this stall.
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Shown: planning, since they costed 200 units and set a price in advance; and teamwork plus record-keeping, since six people shared jobs and the group could state revenue and cost precisely. That record is itself an entrepreneurial asset.
Lacking: risk management - no weather contingency and no pre-selling before committing ₹1,600 to ingredients; and market research - Ravi generalised from a single rainy day. Pricing discipline was shaky too: ₹15 against an ₹8 ingredient cost looks healthy until the 20% waste is counted.
One grounded method: pre-orders with a small token amount. It converts a guess into a number before money is spent, reduces the wasted 40 units, and gives next year's group real demand data instead of an impression of a busy queue.