Question

You're the owner of a club and 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. You estimate for the beer sales is 30,000 drinks
will be sold with a selling price of $3.50 and a variable cost of $.75. The second major category is meals, which you expect to sell 10,000 units with an average
price of $10.00 and a variable cost of $5.00. The third category is desserts and wine, which you expect to sell 10,000 units but with an average price of $5.00 and a
variable cost of $1.00 per unit. The final category is lunches and sandwiches, which you expect to total 20,000 units at an average price of $6.25 with a variable cost
of $3.25. Your fixed costs are rent and utilities of $1800 per month and entertainment of $2000 per month.
a. What is your break even point in dollars per month

Answer 1