Multiple Product Breakeven Analysis

The County of Alameda in California has decided to open the Alameda County Fairgrounds for a two-day Yelling About Yellow! (YAY!) outdoor festival celebrating the countys breakthrough into the yellow Minimal tier of COVID 19 risk. While the county intends to enforce appropriate COVID 19 safeguards and guidelines consistent with the Minimal tier, a large turnout is expected of people wanting to enjoy the sunshine, fresh air, and top-billed performers and other entertainment.

The owner of Tonis Baloney Bar-B-Q (T3BQ) is considering renting a space for the entire two- day event. However, she needs to confirm that T3BQ has sufficient staff, equipment, and other resource capacity to support the sales quantity of food and drinks required to cover the total costs of the two-day event and break into the Profit Corridor she learned about in MGMT360.

Toni has studied historical T3BQ sales data from similar events at the Fairgrounds, including various farmers markets, and the annual week-long Fourth of July celebration. She has also estimated the fixed and variable costs of participating in the entire YAY! weekend. All of Tonis calculations are incorporated in the following tables:

Food and Drinks	Price per Unit	Variable Cost per Unit	Historical % of Total Sales $
Hamburger Plate	$6.50	$3.50	45%
Hot Dog Plate	$4.50	$2.50	25%
Stuffed Jalapenos	$4.00	$2.00	20%
Soda	$2.00	$1.50	5%
Iced Tea	$2.00	$1.00	5%

Total Fixed Costs for the entire two-day event (do not annualize)
Description	Comment	Total Fixed Costs for Entire 2 Days
T3BQ Labor, set up, staff, tear down	2 people, 2 days @ $250/day/person	$500
Rental, booth and surrounding space	Two full days @ $300/day	$600
Rental, food and beverage equipment	2 days @ $200/day	$400

Assignment

1. Assuming the data prepared by Toni is accurate, what is the breakeven point (in total sales dollars) for participating in the entire two days of YAY!? Show your calculations using Excel*.
2. Continuing to assume valid data from Toni, what is the breakeven point (in units and dollars) for each of the T3BQ Food and Drink items that are planned for sale at YAY!. Show your calculations using Excel*. Explain your calculations and results, including considerations relating to capacity and constraints.