Question

you are opening a food truck. Your overhead inculde

truck $250 per month

Equipment for making and storing food $350 per month

License $200 good for two years

Advertising $500 per month

labor $20 per hour and you are open for 8 hours per say and 5 days per week. Assume 4 weeks to the month.

ingredients: $2.50 per sandwich sold

Selling price per sandwich $5.00

calculate the break even point in sandwiches sold. the cost of labor goes to $25 per hour and you raise your price to $5.50, what is the new breakeven? Break Even point = (fixed cost) / (price- value cost)

Answer 1

Break Even Point
	Year
Total Fixed Cost	Amount in $
Truck (250*12)	3,000
License (200/2)	100
Storage	4,200
Advertising	6,000
Labor cost (20*8*4*12)	7,680
Total	20,980
Variable cost per unit (ingredients)	2.5
Selling price per unit	5
Break Even Point = (fixed cost) / (price- value cost)	= 20980/(5-2.5)
	= 8392
We need to sell 8392 sandwiches in a year to reach the Break-even point
We need to sell 699 (8392/12) sandwiches in a month to reach the Break-even point
The cost of labor goes to $25 per hour and you raise your price to $5.50
	Year
Total Fixed Cost	Amount in $
Truck (250*12)	3,000
License (200/2)	100
Storage	4,200
Advertising	6,000
Labor cost (25*8*4*12)	9,600
Total	22,900
Variable cost per unit (ingredients)	2.5
Selling price per unit	5.5
Break Even Point = (fixed cost) / (price- value cost)	= 22900/(5.5-2.5)
	= 7633.33
We need to sell 7633 sandwiches in a year to reach the Break-even point
We need to sell 636 (7633/12) sandwiches in a month to reach the Break-even point