Question

Calculate the total fixed costs, the variable costs per taco sold, and the number of tacos...

Calculate the total fixed costs, the variable costs per taco sold, and the number of tacos needed to sell in order to turn a $2,000 profit according to the data given in class.

Total Fixed Costs: Add all fixed MONTHLY costs (break down any annual costs to monthly)

Total Variable Costs: Add all variable PER UNIT costs (break everything down to a cost per unit made or sold)

Taco Stand Case Study:

Rent for your Stand - $600/month

Meat for 12 tacos - $3.00/lb

Cheese for 20 tacos - $2.00/lb

Liability Insurance - $200/month

10 taco shells - $1.00

Lettuce for 25 tacos - $.50/head of lettuce

Sauce Packet for 1 taco - $.10/packet

Taco wrapper for 1,000 tacos - $20/one-thousand wrappers

Personal Health Insurance - $1,320/year

  1. What are your fixed costs per month?
  2. What are your variable costs per taco?
  3. At a price of $1.50 per taco, how many tacos must you sell to make a $2,000 monthly profit??
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