Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

As a prospective owner of a club known as the Red Rose, you are interested in determining the volume of sales dollars necessary for the

As a prospective owner of a club known as the Red Rose, you are interested in determining the volume of sales dollars necessary for the coming month to reach the break-even point. You have decided to break down the sales for the club into four categories, the first category being beer. Your estimate of the beer sales is that 32,000 drinks will be served. The selling price for each unit will average $1.75; the cost is $1.25. The second major category is meals, which you expect to be 8,000 units with an average price of $12.00 and a cost of $5.50. The third major category is desserts and wine, of which you also expect to sell 12,000 units, but with an average price of $2.50 per unit solc and a cost of $0.75 per unit. The final category is lunches and inexpensive sandwiches, which you expect to total 20,000 units at an average price of $6.50 with a food cost of $3.50. Your fixed cost (i.e., rent, utilities, and so on) is $1,800 per month plus $2,000 per month for entertainment.
a) For Red Rose, the monthly break-even point in dollars =$ per month (round your response to two decimal places).
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Behavioral Finance And Wealth Management

Authors: Michael M. Pompian

2nd Edition

1118014324, 978-1118014325

More Books

Students also viewed these Finance questions

Question

Describe one problem related to internal validity.

Answered: 1 week ago