As a potential owner of a club known as Club Salida, you are interested indetermining the necessary volume of sales in dollars to reach the breakeven nextyear. You decided to break down the club's sales into. four categories, where beer isthe first. Your estimate of the sale of beer is that it will serve 30,000 servings. Theselling price per unit will average $ 1.50; its cost is $ .75. The second category isfood, of which you expect sell 10,000 units with an average unit price of $ 10.00 anda cost of $ 5.00. The third category is desserts and wine, of which you also hope tosell 10,000 units, but with an average unit price of $ 2.50 and a cost of $ 1.00.The last category is inexpensive lunches and sandwiches, of which you expect sella total of 20,000 units with an average price of $ 6.75 and a cost per unit of $ 3.25.Your fixed costs (i.e. rent, utilities, etc.) are $ 1,800 a month plus $ 2,000 a monthfor entertainment.a) What is your breakeven point in dollars per month?b) What is the expected number of meals per day if the establishment is open 30days a month?

This question is related to the topic of the break-even method and this topic falls under the…

Answered: a) What is your breakeven point in…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter11: Simulation Models

Section: Chapter Questions

Problem 68P

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a) What is your breakeven point in dollars per month? b) What is the expected number of meals per day if the establishment is open 30 days a month?