Here are the calculations for the five areas of concern that you mentioned to me earlier. 1. Total fixed cost that must be covered at each of the games: Fixed costs per game include $20,000 food service salaries, $4,800 to cover costs of 6 booths
$1,260 hourly wages for 36 booth employees
Total fixed costs per game: 20,000 + 4,800 + 1,260 = $26,060 2. The portion of the fixed cost allocated to each of the items: Soft drink sales need to cover 25% of fixed costs, or $6,515 Coffee sales need to cover 25% of fixed costs, or $6,515
Hot dog sales need to cover 20% of fixed costs, or $5,212
Hamburger sales need to cover 20% of fixed costs, or $5,212
Miscellaneous snacks need to cover 10% of fixed costs, or $2,606 3. What unit sales would be at break-even for each item: A soft drink costs $0.75 and is sold for $1.50, which is $0.75 of revenue. To reach the soft drink break-even point, $6,515/$0.75 = 8,687 must be sold. A cup of coffee brings in $1.50 in revenue. $6,515/$1.50 = 4,343 cups of coffee need to be sold. A hot dog brings in $1.20 in revenue. $5,212/$1.20 = 4,343 hot dogs need to be sold. A hamburger brings in $1.50 in revenue. $5,212/$1.50 = 3,475 hamburgers need to be sold. A miscellaneous snack brings in $0.60 in revenue. $2,606/$0.60 = 4,343 snacks need to be sold. 4. The dollar sales for each to be at these break-even points 8,687 soft drinks at $1.50 each bring in $13,030.50.
4,343 cups of coffee at $2.00 each bring in $8,686.00
4,343 hot dogs at $2.00 bring in 8,686.00.
3,475 hamburgers at $2.50 each bring in $8,687.50
4,343 snacks at $1.00 each bring in $4,343.00
Total break-even food service sales: $43,433.00
5. Realistic sales estimates per attendee for attendance of 60,000 and 35,000. Spending estimate per attendee for a crowd of 35,000 are $43,433/35,000 = $1.24 per attendee. Spending estimate per attendee for a crowd of 60,000 are $43,433/60,000 = $0.72 per attendee. Reference
Render, B., & Stair, R....
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