Question

Below is a potential menu for the stadium’s concession stand.
ITEM Selling Price   Variable Cost   Percent of Revenue
Hot Dog $3.00 $2.00 15%
Hamburger $4.00 $2.50   15%
French Fries   $4.50 $3.25 20%
Pizza $5.00   $4.00 5%
Nachos $4.25 $2.75 10%
Pretzel $2.75 $2.00 15%
Soda/Water   $3.00 $1.00 25%

how do you calculate the Fixed cost for each item?

Answer 1

-- Selling Price, Varable cost and Profit % given in th question. You need to know the cost sheet structure to calculate the Fixed Cost. Cost sheet looks as

Selling Price xxx

Less Variable cost xxx

= Contribution xxx

Less: Fixed cost xxx

Profit margin xxx

So below is the calculation

Particulars	Hot Dog	Hamburger	Fresnch Fries	Pizza	Nachos	Pretzel	Soda/Water
Selling Price	3	4	4.5	5	4.25	2.75	3
Variable Cost	2	2.5	3.25	4	2.75	2	1
Contribution	1	1.5	1.25	1	1.5	0.75	2
Fixed Cost ( Balancing Figure)	0.55	0.9	0.35	0.75	1.075	0.3375	1.25
Profit % of Revenue	0.45	0.6	0.9	0.25	0.425	0.4125	0.75