Answered: Based on the information available,…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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As manager of the St. Cloud Theatre Company, you have decided that concession sales will support themselves. The following table provides the information you have been able to put together thus far:

Item	Selling Price	Variable Cost	% of Revenue
Soft Drink	$1.20	$0.70	24
Wine	$2.00	$1.00	26
Coffee	$1.00	$0.35	30
Candy	$0.75	$0.30	20

Last year's manager, Scott Ellis, has advised you to be sure to add 10% of variable cost as a waste allowance for all categories. You estimate labor cost to be $250.00 (5 booths with 3 people each). Even if nothing is sold, your labor cost will be $250.00, so you decide to consider this a fixed cost. Booth rental, which is a contractual cost at $80.00 for each booth per night, is also a fixed cost.

a) Based on the information available, the per night break-even point in dollars for the St. Cloud Theatre Company = $_____ (round your response to two decimal places).

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