Determining the volume of sales dollars

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Reference no: EM131284036

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, the first category being beer. Your estimate of the beer sales is that 30,000 drinks will be served. The selling price for each unit will average $1.50?; the cost is $0.75. The second major category is? meals, which you expect to be 10,000 units with an average price of $12.00 and a cost of $5.00. The third major category is desserts and? wine, of which you also expect to sell 10,000 ?units, but with an average price of $2.50 per unit sold and a cost of $1.25 per unit. The final category is lunches and inexpensive? sandwiches, which you expect to total 24,000 units at an average price of $6.50 with a food cost of $3.75. Your fixed cost? (i.e., rent,? utilities, and so? on) is $1,800 per month plus $2,000 per month for entertainment.

a) For Red Rose, the monthly break-even point in dollars per month is:

b) What is the expected number of meals each day if you are open 30 days?

Reference no: EM131284036

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