2-37 Adding a Product Andy's Ale House, a pub located near State University, serves as a gathering place for the university's more social scholars. Andy sells beer on draft and all brands of bottled beer at a contribution margin of 60 a beer. Andy is considering also selling hamburgers during selected hours. His reasons are twofold. First, sandwiches would attract daytime customers. A hamburger and a beer are a quick lunch. Second, he has to meet competition from other local bars, some of which provide more extensive menus. Andy analyzed the costs as follows: Per Month Monthly fixed expenses Wages of part-time cook $1,200 Other I 360 Total $1,560 Per Hamburger Variable expenses Rolls Meat @ $2.80 per pound (7 hamburgers per pound) Other Total $.12 .40 18 70 sapter 2 Introduction to Cost Behavior and Cost-Volume Relationships Andy planned a selling price of $1.10 per hamburger to lure many customers. all questions, assume a 30-day month. What are the monthly and daily break-even points, in number of hamburgers? What are the monthly and daily break-even points, in dollar sales? 69 3. At the end of two months, Andy finds he has sold 3,600 hamburgers. What is th operating prolit per month on hamburgers? Andy thinks that at least 60 exting beers are sold per day because he has these ham burgers available. This means that 60 extra people come to the bar or that 60 buy an extra beer because they are attracted by the hamburgers. How does this affect Andy's monthly operating income? 5. Refer to requirement 3. How many exuia beers would have to be sold per day so that the overall effects of the hamburger sales ca imonthly sperating income would be vero?