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As a prospective owner of a club known as the Red Rose, you are interested in determining the volume of sales dollars necessary for the coming year to reach the break-even point. You have decided to break down the sales for the club into four categories, they are as follows: Category Estimated Sales Cost per unit Sales price per unit

As a prospective owner of a club known as the Red Rose, you are interested in determining the volume of sales dollars necessary for the coming year to reach the break-even point. You have decided to break down the sales for the club into four categories, they are as follows: Category Estimated Sales Cost per unit Sales price per unit

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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As a prospective owner of a club known as the Red Rose, you are interested in determining the volume of sales dollars necessary for the coming year to reach the break-even point. You have decided to break down the sales for the club into four categories, they are as follows: Category Estimated Sales Cost per unit Sales price per unit Beer 32,000 $1.25 $1.75 Meals 8,000 $5.00 $12.00 Dessert/Wine 10,000 $0.75 $2.50 Lunches/Sandwiches 24,000 $3.50 $6.25 Your fixed cost is $1800 per month plus $2000 per month for entertainment. a) What is your break even point? b).What is the expected number of meals eaach day if you are open 30 days a month?
Transcribed Image Text:As a prospective owner of a club known as the Red Rose, you are interested in determining the volume of sales dollars necessary for the coming year to reach the break-even point. You have decided to break down the sales for the club into four categories, they are as follows: Category Estimated Sales Cost per unit Sales price per unit Beer 32,000 $1.25 $1.75 Meals 8,000 $5.00 $12.00 Dessert/Wine 10,000 $0.75 $2.50 Lunches/Sandwiches 24,000 $3.50 $6.25 Your fixed cost is $1800 per month plus $2000 per month for entertainment. a) What is your break even point? b).What is the expected number of meals eaach day if you are open 30 days a month?
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