A restaurant is considering adding fresh brook trout to itsmenu. Customers would have the choice of catching theirown trout from a simulated mountain stream or simply ask-ing the waiter to net the trout for them. Operating the streamwould require $10,600 in fixed costs per year. Variable costsare estimated to be $6.70 per trout. The firm wants to breakeven if 800 trout dinners are sold per year. What should bethe price of the new item?

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.