Assume instead of one product (BBQ sandwich), Mei & Wei's Grill served three products: the BBQ sandwich, which sold for $12 and had variable costs of 40% of sales price; the beef Taco, which sold for $9 and had variable costs of 35%, and the Mac and Cheese Pulled Pork, which sold for $12 and had variable costs of 50%. Fixed costs were expected to remain at $10,000 per year (180 operational days) and income taxes were expected to be 20%. On a typical day, Mei and Wei would serve 125 customers. 25 customers would order Mac and Cheese Pulled Pork, 25 would order beef Tacos, and 75 would order BBQ sandwich. Assuming a constant sales mix, if the entrepreneurs wish to earn a target profit of $100,000 after tax, how many units of each item must be sold?

Assume instead of one product (BBQ sandwich), Mei & Wei's Grill served three products: the BBQ sandwich, which sold for $12 and had variable costs of 40% of sales price; the beef Taco, which sold for $9 and had variable costs of 35%, and the Mac and Cheese Pulled Pork, which sold for $12 and had variable costs of 50%. Fixed costs were expected to remain at $10,000 per year (180 operational days) and income taxes were expected to be 20%. On a typical day, Mei and Wei would serve 125 customers. 25 customers would order Mac and Cheese Pulled Pork, 25 would order beef Tacos, and 75 would order BBQ sandwich. Assuming a constant sales mix, if the entrepreneurs wish to earn a target profit of $100,000 after tax, how many units of each item must be sold?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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