Question
A local country club provides food services to their members for convenience. The club president is interested to understand the break-even point of their food
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A local country club provides food services to their members for convenience. The club president is interested to understand the break-even point of their food services. The president would like to see that the food services sales will support itself. The following table provides the information regarding their food services
Items | Selling Price | Variable Cost | % of Revenue |
Soft Drink | $1.00 | $0.65 | 26 |
Wine | $2.00 | $0.90 | 24 |
Coffee | $1.00 | $0.30 | 30 |
Candy | $0.75 | $0.30 | 20 |
Last year's president has advised the new president to be sure to add 10% of variable cost as a waste allowance for all categories (i.e., increase the variable cost by 10%). Labor cost is estimated to be $280.00 (5 equipments with 3 people each) fixed per day. Even if nothing is sold, the labor cost will be $280.00, so it is considered to be a fixed cost. Equipment rental, which is a contractual cost at $55 for each equipment per day, is also a fixed cost
a) Based on the information available, per day break-even point in dollars for the club = $____ (round your response to two decimal places)\
.b) Based on the given information, per day break-even point in servings for wine =____ servings (round your response to one decimal place).
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