Break-even analysis of capacity

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Reference no: EM132238560

Case Study : Break-Even Analysis of Capacity

As manager of the Best Drinks Company in Hayward, you would like to sell drinks at a booth during the one-day major celebration in the Hayward’s Central Park. The following table provides information about the drinks that you will be selling:

You estimate labor cost to be $300 (2 people, $150 dollars each per day at the booth). Even if nothing is sold, your labor cost will be still $300, so you decide to consider this a fixed cost. Booth rental, $500, is also a fixed cost. Apply the total fixed cost for your break-even analysis, and do not annualize the fixed cost.

Questions

What is the break-even volume (in dollars) for selling drinks at the booth? Show your calculations using Excel.

How much would you expect to sell at the break-even point for each item (in dollars and units)? Present and explain your calculations and results in the Excel file.

Reference no: EM132238560

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