Question
Bridget, a college student, plans to operate a hot dog stand at the beach during the summer for three months. Her fixed costs for the
Bridget, a college student, plans to operate a hot dog stand at the beach during the summer for three months. Her fixed costs for the booth, which include utilities, will be $2,600. Variable costs per hot dog will be $1.50 for materials and $0.40 for a franchise fee from the hot dog supplier. This year's sales are expected to be 20,000 units based upon the operation of the same booth the prior year. Bridget needs to earn $10,000 so that she can pay part of her college expenses for the coming academic year. Based on competitor's prices, her target price is $2.40 Required: Determine whether she can expect to earn the $10,000 at the target price.
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