Homework: Homework 3 Capacity and Constraint Management Score: 0 of 2 pts Instru

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Homework: Homework 3 Capacity and Constraint Management Score: 0 of 2 pts Instructor-created question Save 9 of 9 (8 complete) Hw Score: 72.5%, 8.7 of 12 pts Question Help As manager othe St. Clo Theatre Company, you have decided that concession sales iill support themselves. The following table provides the infarmation you have been able to put together thus far Item Soft Drink Wine Coffee Candy Selling Price $1 25 $2.00 $125 50.75 Variable Cost $0.60 $0.90 0.30 $0.25 %of Revenue 26 24 30 20 Last years manager, im Freeland, has advised you to be sure to add 10%% of variable cost as a waste allowance for all categories. Yau estimate lahar cost ta be $280.00 (5 hoons with 3 people each). Even it nathing is sald, your labor cost will e $2a0.aa, sa you decide to consider this a fixed cost. Booth rental, which is a comtractual cost at 60.00 for each booth per night, is also a fixed cost. Based on the information available, th dal reak-even point in dollars for the SI Cloud Theatre Campany = $ own your response to Mo decima, pisces

Explanation / Answer

Answer:

Explanation:

Contribution margin for each :

Contribution margin for each considering extra 10% variable cost :

Contribution margin for per $ of sale = Weighted average contribution margin / Weighted sale price

So Contribution margin for per $ of sale = 0.7668 /1.33 = $0.5765 / dollar of sale

Fixed cost = labour cost + (Per booth cost * no. of booths) = 280+ 60*5 = $580

Break even sale = Fixed Cost / Contribution margin = 580 /0.5765 = $1005.999

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