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CVP Analysis Joe, a student at ND, has decided to start a business. He has decided to open a Brat stand between the football stadium
CVP Analysis Joe, a student at ND, has decided to start a business. He has decided to open a Brat stand between the football stadium and the Mendoza College of Business Building on football Saturdays. He expects to sell Brats for $4.00 each. Below are a list of his expected costs. Variable Costs (per unit): Brat Buns Mustard Ketchup Sour Kraut Wrapper Total Variable Costs $ 1.13 $ 0.52 $ 0.05 $ 0.05 $ 0.18 $ 0.51 $ 2.44 Fixed Costs: Workers Wages Rent space/Permit cost Gas for Grill Ice $7.50/hour, need two workers for three hours each $ 160.00 $ 100.00 15 bags of ice at $3.89 each Joe is contemplating selling more than just Brats. In fact, he thinks that he should also sell hamburgers and bottled water. He believes that he will sell 110 Brats, 85 hamburgers and 205 bottles of water. He expects to sell hamburgers for $4.50 each and bottles of water for $2.00 each. Below are the costs associated with each of these items: Sales price per Hamburger $ 4.50 Variable Costs (per unit): Meat Buns Mustard Ketchup Cheese Pickles Total Variable Costs $ 1.51 $ 0.47 $ 0.05 $ 0.10 $ 0.28 $ 0.18 $ 2.59 Sales Price for Bottled Water $ 2.00 Variable Cost (per bottle) $ 0.53 PART 2: REQUIRED 14. Prepare a contribution margin income statement for each item to be sold and for the company as a whole. 15. What is the weighted average Contribution Margin percentage (ratio)? 16. At the Breakeven point, what will SALES DOLLARS of ALL PRODUCTS will be? 17. At the Breakeven point, what will SALES DOLLARS of Brats will be? 18. At the Breakeven point, what will SALES DOLLARS Hamburgers will be? 19. At the Breakeven point, what will SALES DOLLARS Bottles of Water will be? CVP Analysis Joe, a student at ND, has decided to start a business. He has decided to open a Brat stand between the football stadium and the Mendoza College of Business Building on football Saturdays. He expects to sell Brats for $4.00 each. Below are a list of his expected costs. Variable Costs (per unit): Brat Buns Mustard Ketchup Sour Kraut Wrapper Total Variable Costs $ 1.13 $ 0.52 $ 0.05 $ 0.05 $ 0.18 $ 0.51 $ 2.44 Fixed Costs: Workers Wages Rent space/Permit cost Gas for Grill Ice $7.50/hour, need two workers for three hours each $ 160.00 $ 100.00 15 bags of ice at $3.89 each Joe is contemplating selling more than just Brats. In fact, he thinks that he should also sell hamburgers and bottled water. He believes that he will sell 110 Brats, 85 hamburgers and 205 bottles of water. He expects to sell hamburgers for $4.50 each and bottles of water for $2.00 each. Below are the costs associated with each of these items: Sales price per Hamburger $ 4.50 Variable Costs (per unit): Meat Buns Mustard Ketchup Cheese Pickles Total Variable Costs $ 1.51 $ 0.47 $ 0.05 $ 0.10 $ 0.28 $ 0.18 $ 2.59 Sales Price for Bottled Water $ 2.00 Variable Cost (per bottle) $ 0.53 PART 2: REQUIRED 14. Prepare a contribution margin income statement for each item to be sold and for the company as a whole. 15. What is the weighted average Contribution Margin percentage (ratio)? 16. At the Breakeven point, what will SALES DOLLARS of ALL PRODUCTS will be? 17. At the Breakeven point, what will SALES DOLLARS of Brats will be? 18. At the Breakeven point, what will SALES DOLLARS Hamburgers will be? 19. At the Breakeven point, what will SALES DOLLARS Bottles of Water will be
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