Using the data below, perform calculations. I need to understand the what the fo

ID: 2475059 • Letter: U

Question

Using the data below, perform calculations. I need to understand the what the formulas are so, please show and explain your work.

Determine your monthly sales needed to have a contribution margin of $10,000

Your new food service operation has the following expenses:

Salary $ 3,000.00 per month

Utilities $ 375.00 per month

Contract Services $ 575.00 per month

Advertising $ 190.00 per month

Rent $ 1,000.00 per month

Insurance $ 100.00 per month

Accounting and Legal fees $ 175.00 per month

Permits and Licenses $ 75.00 per month

Operating Supplies 10% of monthly sales

Hourly Wages 30% of monthly sales

Food Cost 25% of monthly sales

Sales - Variable expense = Contribution Margin

Sales = Contribution MArgin + variable expense

Let Sales be x

VAriable expense = Operating Supplies+Hourly Wages +Food Cost

VAriable Expense = 0.1x+0.3x+0.25x

VAriable expense = 0.65x

Contribution MArgin = $10000

Sales = $10000+$0.65x

All others are fixed Expenses.

Thus , Sales = $10000+0.65x

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.