Samantha Kelly, a student at SWOSU, plans to open a barbeque stand inside SWOSU’s Milam stadium...

Samantha Kelly, a student at SWOSU, plans to open a barbeque stand inside SWOSU’s Milam stadium during home games. There are seven home games scheduled for the upcoming season. The football season is 14 weeks or 98 days long. She must pay the SWOSU athletic department a vendor’s fee of $3,000 for the season. Her stand and other equipment will cost her $2,500 for the season. She estimates that each chopped beef brisket sandwich she sells will cost her $1.75. She has talked to friends at other universities who sell food at games. Based on their information and the athletic department’s forecast that each game will sell out, she anticipates that she will sell approximately 675 chopped beef brisket sandwiches during each game. What price should she charge for a chopped beef brisket sandwich in order to break even for the season. Write an analysis of your calculations and discuss what Samantha should do based on your calculations.

Solutions

Expert Solution

Sell approximately 675 chopped beef brisket sandwiches during each game
There are seven home games scheduled for the upcoming season
Total chopped beef brisket sandwiches sold during season (675*7)			4725

Vendor’s fee of $3,000 for the season			3000
Stand and other equipment will cost			2500
Total fixed cost			5500
Divided by : chopped beef brisket sandwiches sold during season			4725
Fixed cost per chopped beef brisket sandwich			1.164021

Fixed cost per chopped beef brisket sandwich			1.164021
Add: variable cost per chopped beef brisket sandwich			1.75
Price should she charge for a chopped beef brisket sandwich in order to break even for the season			2.914021
Price should she charge for a chopped beef brisket sandwich in order to break even for the season (Rounded)			2.91

Samantha should set minim price unit for achieve break-even sales is 2.91

ekkarill92 answered 9 months ago

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