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Hi, how do i solve #3?

Hi, how do i solve #3?

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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Hi, how do i solve #3?

Imagine that you are planning to open a nachos (a Mexican cuisine) place in the Forks Commons in Winnipeg. The average price customers are willing to pay for 1 bowl of nachos is $10. Fixed cost (FC) is $5,000 per month (store rent, interest on bank loan, and other fixed expenses). Unit Variable Cost (UVC) is $5 (chips, toppings, and labor). (1) You wish to estimate how many nacho bowls you need to sell to cover fixed cost at $10 per bowl (in other words, to reach break-even point) (10 points) (2) Based on your marketing research, you estimate that approximately 900 bowls of nacho can be sold per month at $10/bowl. If Fixed Cost and Unit Variable Cost (UVC) remain as planned, will you make a profit or loss each month? How much is the profit or loss? (15 points) (3) If Fixed Cost and Unit Variable Cost (UVC) remain as planned, if you want to get $1,300 profit at 900 bowls sold per month (based on market research report in (2)), how much do you need to sell each bowl of nachos for? (10 points)
Transcribed Image Text:Imagine that you are planning to open a nachos (a Mexican cuisine) place in the Forks Commons in Winnipeg. The average price customers are willing to pay for 1 bowl of nachos is $10. Fixed cost (FC) is $5,000 per month (store rent, interest on bank loan, and other fixed expenses). Unit Variable Cost (UVC) is $5 (chips, toppings, and labor). (1) You wish to estimate how many nacho bowls you need to sell to cover fixed cost at $10 per bowl (in other words, to reach break-even point) (10 points) (2) Based on your marketing research, you estimate that approximately 900 bowls of nacho can be sold per month at $10/bowl. If Fixed Cost and Unit Variable Cost (UVC) remain as planned, will you make a profit or loss each month? How much is the profit or loss? (15 points) (3) If Fixed Cost and Unit Variable Cost (UVC) remain as planned, if you want to get $1,300 profit at 900 bowls sold per month (based on market research report in (2)), how much do you need to sell each bowl of nachos for? (10 points)
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