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

Break even point may refer to the sales level at which the firm is able to recover all its costs. In…

Answered: As a prospective owner of a club known…

FINANCIAL ACCOUNTING

10th Edition

ISBN: 9781259964947

Author: Libby

Publisher: MCG

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Question

Please do not give solution in image format thanku

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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