3. As manager of the St. Cloud Theater Company, you have decided that concession sales would support themselves. The following table provides the information you have been able to put together thus far: Selling Price $1.00 1.75 1.00 1.00 Item Softdrink Variable Cost Percent of Revenue $0.65 25 25 30 20 0.95 0.30 Wine Coffee | Candy 0.30 Last year's manager. Jim Freeland, has advised you to add 10% of variable cost as a waste allowance for all categories. You estimated labor cost to be $250.00 (5 booths with 2 people each). Even if nothing is sold, your labor cost will be $250.00, so you decide to consider this as fixed cost. Booth rental, which is a contractual cost of $50.00 for each booth per night, is also a fixed cost. a. What is the break-even volume per evening of performance? b. How mush would you expect to sell each evening at the break-even point?

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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3. As manager of the St. Cloud Theater Company, you have decided that concession sales would
support themselves. The following table provides the information you have been able to put
together thus far:
Item
Softdrink
Selling Price
$1.00
Variable Cost
$0.65
Percent of Revenue
Wine
Coffee
1.75
1.00
0.95
0.30
25
25
30
Candy
1.00
0.30
20
Last year's manager. Jim Freeland, has advised you to add 10% of variable cost as a waste
allowance for all categories.
You estimated labor cost to be $250.00 (5 booths with 2 people each). Even if nothing is sold,
your labor cost will be $250.00, so you decide to consider this as fixed cost. Booth rental, which
is a contractual cost of $50.00 for each booth per night, is also a fixed cost.
a. What is the break-even volume per evening of performance?
b. How mush would you expect to sell each evening at the break-even point?
Transcribed Image Text:3. As manager of the St. Cloud Theater Company, you have decided that concession sales would support themselves. The following table provides the information you have been able to put together thus far: Item Softdrink Selling Price $1.00 Variable Cost $0.65 Percent of Revenue Wine Coffee 1.75 1.00 0.95 0.30 25 25 30 Candy 1.00 0.30 20 Last year's manager. Jim Freeland, has advised you to add 10% of variable cost as a waste allowance for all categories. You estimated labor cost to be $250.00 (5 booths with 2 people each). Even if nothing is sold, your labor cost will be $250.00, so you decide to consider this as fixed cost. Booth rental, which is a contractual cost of $50.00 for each booth per night, is also a fixed cost. a. What is the break-even volume per evening of performance? b. How mush would you expect to sell each evening at the break-even point?
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