Refer to the problem S727 in your textbook Item Selling pric

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)

Solution

a)

break even revenue per evening perfomance 250

b)

expected wine to sell is 150