Refer to the problem S7.27 in your textbook. Item Selling price ($) Variable Cos

Question

Refer to the problem S7.27 in your textbook. Item Selling price ($) Variable Cost ($) % of revenue Soft Drink 1.00 0.65 25 Wine 1.75 0.95 25 Coffee 1.00 0.30 30 Candy 1.00 0.30 20 Last year's manager had advised you to be sure to add 10% of variable cost as a waste allowance for all categories. You estimate the labor cost to be $250.00 (5 booths with 2 people each). Even if you don't sell anything, labor cost will still be $250. Booth rental, contractual cost, is $50 per booth, is also fixed cost. a) What is the break-even revenue per evening performance? b) How much wine would you expect to sell each evening at the break-even point? Please mark you answers as clearly as possible and show your work (calculations)

Explanation / Answer

a)

break even revenue per evening perfomance 250

b)

expected wine to sell is 150

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