As manager of the Best Drinks Company in Hayward, you would like to sell drinks at...

As manager of the Best Drinks Company in Hayward, you would like to sell drinks at a booth during the major celebration in the Hayward’s Central Park. The following table provides information about the drinks that you will be selling: You estimate labor cost to be $600 (2 people, $300 dollars each per day at the booth). Even if nothing is sold, your labor cost will be still $600, so you decide to consider this a fixed cost. Booth rental, $400, is also a fixed cost. Apply the total fixed cost for your break-even analysis, and do not annualize the fixed cost.

Items	Price per unit, $	Var. cost per unit, $	% of Sales
Soft drinks	1.50	0.45	0.20
wine	5.29	2.76	0.15
Coffee	1.99	0.76	0.30
Tea	1.50	0.35	0.05
Water	1.00	0.29	0.30

Questions What is the break-even volume (in dollars) for selling drinks at the booth? Show your calculations manually or use Excel. How much would you expect to sell at the break-even point? Present and explain your calculations.

Expert Solution

jeff jeffy answered 7 months ago

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