Question

In: Finance

Please solve the following breakeven analysis problem and show all systems of equations and work. (Excel...

Please solve the following breakeven analysis problem and show all systems of equations and work. (Excel solver is not neccessary for this problem)

Jim and Pam are going to Culinary School! There are a group of students at the school who are drug dealers, and the Captain has received information that they are looking to start selling a dangerous new street drug to the residents of the town nearby. Jim and Pam infiltrate this group and propose that they use the school’s kitchens in the evening (5-10pm, 7 days/week) to cook and deliver food to the town’s residents and use the deliveries to sell drugs. The group seems to be on board with this plan, so our boys just need to start and operate the business for some time so that they can gather information and evidence for their investigation.

Jim and Pam will need a van for the deliveries, so the Captain agrees to spend $4,300 on a used van for them. In order to look like a legitimate business, they will pay their employees $8/hour for the 5-10pm shifts. For now, they only have one student working each evening. Each delivery will cost $1.35, and they expect that each orders meals will cost $15 on average to prepare and will bring in $34 in revenue.

A. The Captain wants them to wrap up the investigation in 2 months (8 weeks). How many meals would they need to make and deliver to breakeven on the cost of the van?

B. As it turns out, Jim is very talented in the kitchen and really enjoys Culinary School. His crème brulee is the talk of the town. But when the cooking becomes more important to him than the case, it doesn’t look like they’ll be able to wrap up the investigation in 2 months. The Captain is not happy and gives Jim an ultimatum: they only have one more month to gather enough evidence to make the arrests or they’re fired! What is the breakeven point for the business over 3 months (12 weeks)?

Solutions

Expert Solution

Question A. Number of meals required to Break even

Revenue per meal

$34

Unit variable costs:

Delivery cost

$1.35

Cost of meal

$15

Total variable cost

$16.35

Unit Contribution

$17.65

Fixed Costs for two months

Cost of van

$4,300

Payment to employee

$ 2,240

(5hours per day*7days/week*8weeks*$8/hour)

Total Fixed Cost

$6540

Break even quantity=Fixed cost/ unit Contribution =6540/17.65=370.54

Number of meals required to Break even=371

Question Number B:Breakeven Point Over Three Months(12 weeks):

Revenue per meal

$34

Unit variable costs:

Delivery cost

$1.35

Cost of meal

$15

Total variable cost

$16.35

Unit Contribution

$17.65

Fixed Costs for two months

Cost of van

$4,300

Payment to employee

$ 3,360

(5hours per day*7 days/week*12weeks*$8/hour)

Total Fixed Cost

$7,660

Break even quantity=Fixed cost/ unit Contribution =7660/17.65=433.99

Number of meals required to Break even=434


Related Solutions

***Excel is required to solve this problem. Please use excel and show all formulas used in...
***Excel is required to solve this problem. Please use excel and show all formulas used in each cell I would really appreciate the work*** Three-Stage FCFE Model: Biomet Inc., designs, manufactures and markets reconstructive and trauma devices, and reported earnings per share of $0.56 in 1993, on which it paid no dividends. (It had revenues per share in 1993 of $2.91). It had capital expenditures of $0.13 per share in 1993 and depreciation in the same year of $0.08 per...
PLEASE SHOW ALL WORK IN EXCEL!!!!!!! SHOW CALCULATIONS / FORMULAS IN EXCEL!!!!!!!! Voters arrive at a...
PLEASE SHOW ALL WORK IN EXCEL!!!!!!! SHOW CALCULATIONS / FORMULAS IN EXCEL!!!!!!!! Voters arrive at a polling station at an average of 4 per minute (Poisson) where the service rate is 50 per hour (Poisson). a. What is the average number of voters in the system with 5 voter booths? (10 pts) b. What is the minimum number of voting booths needed to keep the average time in the system under three minutes? (10 pts) PLEASE SHOW ALL WORK IN...
Please solve all parts of the following question. Please show all work and all steps. 1a.)...
Please solve all parts of the following question. Please show all work and all steps. 1a.) Solve x' = x + 3y + 2t y' = x - y + t^2 1b.) Solve x' + ty = -1 y' + x' = 2 1c.) Solve x' + y = 3t y' - tx' = 0
Please solve the following questions. Please show all work and all steps. 1a.) Find CDF of...
Please solve the following questions. Please show all work and all steps. 1a.) Find CDF of the Bernoulli Distribution. 1b.) Explain your reasoning for part 1a above. Do not use a series result. 2a.) For the geometric distribution, show that the geometric pdf is actually a pdf (all probabilities are greater than or equal to 0 and the sum of the pdf from x=1 to x=infinity is equal to 1). 2b.) Find E(X) for 2a above. 2c.) Find V(X) for...
Please solve the recurrence relation by finding the explicit formula of each problem. Show all work,...
Please solve the recurrence relation by finding the explicit formula of each problem. Show all work, thanks! A. ck = 6ck-1 - 9ck-2      k≥2,   c0 =1, c1=3 B. dk = 2dk-1 +k                       k≥1,   d0 =1, d1=3 C. ak = 3ak-1 + 2                         k≥1,   a0 =3 D. bk = -bk-1 + 7bk-2    k≥2,   b0 =1, b1=4
Identify the Bronsted acid and base in each of the following equations: Please show all work...
Identify the Bronsted acid and base in each of the following equations: Please show all work on how you got the answer so I can understand. HNO3 + H2O
A) Please set up The Simultaneous Equations for both plans and solve for the breakeven point...
A) Please set up The Simultaneous Equations for both plans and solve for the breakeven point where Plan A and Plan B will have the same cost outlay. ( B)Which plan will be cheaper in the short run and which plan will be cheaper in the long run? Please show Graph.
Please show work and use the actual equations, not excel ones. An RV manufacturer estimates that...
Please show work and use the actual equations, not excel ones. An RV manufacturer estimates that annual profits will increase if a mobile model is built and taken to trade shows to market their product line. A finance and engineering team has looked at the issue and has developed to options: 1.) A large model can be developed at a cost of $75,000, and it should increase annual profits by $25,000 per year. 2.) A small model can be developed...
Please show formulas using excel Build a spreadsheet: Construct an Excel spreadsheet to solve all of...
Please show formulas using excel Build a spreadsheet: Construct an Excel spreadsheet to solve all of the preceding requirements. Show how the solution will change if the following data change: the April 1 work-in-process costs were $66,000 for direct material and $18,000 for conversion. Work in process, April 1—10,000 units: Direct material: 100% complete, cost of .........................................................................................................$ 22,000 Conversion: 20% complete, cost of ................................................................................................................. 4,500 Balance in work in process, April 1 ..................................................................................................................$  26,500 Units started during April ......................................................................................................................................100,000 Units...
Please solve A, B, and C. Please use excel. Please show work. Thank you. A. Use...
Please solve A, B, and C. Please use excel. Please show work. Thank you. A. Use the stocks of Apple, SAP, IBM, Oracle, and Amazon Download the historical data of weekly stock prices and S&P 500 index prices from year 2017-2019 on the website of yahoo finance and save it on an excel file. B. Use a different sheet to save the market adjusted prices of Apple, SAP, IBM, Oracle, and Amazon t and the index. For each stock, compute...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT