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The Arizona State Fair is one of the largest state fairs in the United States (Click the icon for additional information about the fair) Assume
The Arizona State Fair is one of the largest state fairs in the United States (Click the icon for additional information about the fair) Assume the following schedule of fees for food vendors at the Arizona State Fair (Click the icon to view the schedule of fees) Nebula Concessions is a vendor at the far (Click the icon to view additional information about Nebula Concessions) Read the requirements More info - It draws nearly one million visitors over the fourteen-day period each July and August. The fair is a non-profit organization. It is self-supporting and needs, at a minimum, to break even by generating revenues through various activities. Among the sources of revenue for The Arizona State Fair are the revenues generated from the food vendors. A number of food vendors offer a wide variety of fair foods to attendees, including funnel cakes, gyros, cotton candy, milkshakes, and corn dogs. Print Done X . More info $13 per linear foot for ground service fees (front footage x depth) 12% of concessions (food sales) $45 per 14-day parking permit $270 for 100-amp electrical service $35 per 14-day fair admittance pass (one is included with basic rental agreement) Print Done X More info It has a food booth that requires 11 feet of front frontage and is 16 feet deep. Nebula Concessions expects to have sales averaging $2,500 per day for each of the 14 days of the fair. It has a total of five employees who will work the fair throughout the entire 14-day period. Nebula Concessions pays for each employee's fair admission and parking. Assume that the employee wages for the 14-day period are expected to total $9,877. Print Done Requirements 1. Of the fees listed in the schedule, which fees are variable with respect to the number of customers at the booth? Which fees are fixed? 2. What is the projected total fee that Nebula Concessions will need to pay to The Arizona State Fair assuming it meets its expected sales level for each of the 14 days of the fair? 3. Assume that variable costs are 60% of sales revenue. (This 60% includes the 12% concession fee charged by The Arizona State Fair.) How much in total sales revenue is needed for Nebula Concessions to break even? 4. Calculate Nebula Concessions' margin of safety both in dollars and percentage
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