As swelling inflation rates continue to hit an array of consumer goods, there's one staple Americans...

 

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"As swelling inflation rates continue to hit an array of consumer goods, there's one staple Americans can rely on: the $1.50 hot dog and soda combo from Costco. Though inflation has reached its highest level since 1990-killing other classic bargains buyers used to rely on, from dollar pizza slices to dollar stores - Costco's iconic hot dog deal has remained the same since it first launched in 1985. "We have no plans to take that hot dog above a buck fifty. End of story." Costco CEO Craig Jelinek told shareholders. The company has publicly committed to maintaining the combo over the years. Costco founder jim Senegal told CEO Craig Jelinek, "If you raise the [price of the] effing hot dog, I will kill you. Figure it out." "It's the mindset that when you think of Costco, you think of the $1.50 hot dog." Jelinek told 425 Business, a local Seattle publication. The commitment to protecting the deal has paid off. During its 2019 fiscal year, Costco sold 151 million hot-dog combos for nearly $226.5 million. The famously inexpensive snacks are part of what draws people to Costco, Jelinek said in April 2021, when the big box chain reopened its food courts during the pandemic. The price has stayed stagnant even as beef, the primary ingredient in Costco hot dogs, has been particularly hard hit by lofty price increases, up over 20% year-over-year in December, according to data from the US Bureau of Labor Statistics." There are three variable costs associated with each sale of a hot dog combo; 1. $1.00 for ingredients (hot dog, bun, condiments, drink, and packaging) 2. $0.50 labor 3. $0.10 operating costs for equipment, cleaning, energy, rent There is also a fixed cost of $1,000 per Costco store for hot dog kitchen equipment in each of the 778 stores. The revenue per hot dog combo is $1.50. Create a workbook with three worksheets to answer the following questions. Remember to have Notes be the first one and label all of them. Label your second worksheet model Costco Hog Dog Combo and use it to answer the first two questions. 1. How much profit does Costco make on 150 million sales at $1.50 per sale using the costs and revenue per combo outlined above? 2. Build a one-way data table to show the profit when you vary the cost of ingredients by 2 cents from $1.00 to $1.20. Label a third worksheet model Costco Labor Breakeven and use it to show your work related to answering the third question. Copy the first worksheet into the second one to have the model you will use. 3. What would be the labor cost for Costco to break even once the ingredients cost $1.20? Format your cells so that formula results that involve money have a dollar sign and do not have more than two positions after the decimal point. Remember to use formatting best practices. "As swelling inflation rates continue to hit an array of consumer goods, there's one staple Americans can rely on: the $1.50 hot dog and soda combo from Costco. Though inflation has reached its highest level since 1990-killing other classic bargains buyers used to rely on, from dollar pizza slices to dollar stores - Costco's iconic hot dog deal has remained the same since it first launched in 1985. "We have no plans to take that hot dog above a buck fifty. End of story." Costco CEO Craig Jelinek told shareholders. The company has publicly committed to maintaining the combo over the years. Costco founder jim Senegal told CEO Craig Jelinek, "If you raise the [price of the] effing hot dog, I will kill you. Figure it out." "It's the mindset that when you think of Costco, you think of the $1.50 hot dog." Jelinek told 425 Business, a local Seattle publication. The commitment to protecting the deal has paid off. During its 2019 fiscal year, Costco sold 151 million hot-dog combos for nearly $226.5 million. The famously inexpensive snacks are part of what draws people to Costco, Jelinek said in April 2021, when the big box chain reopened its food courts during the pandemic. The price has stayed stagnant even as beef, the primary ingredient in Costco hot dogs, has been particularly hard hit by lofty price increases, up over 20% year-over-year in December, according to data from the US Bureau of Labor Statistics." There are three variable costs associated with each sale of a hot dog combo; 1. $1.00 for ingredients (hot dog, bun, condiments, drink, and packaging) 2. $0.50 labor 3. $0.10 operating costs for equipment, cleaning, energy, rent There is also a fixed cost of $1,000 per Costco store for hot dog kitchen equipment in each of the 778 stores. The revenue per hot dog combo is $1.50. Create a workbook with three worksheets to answer the following questions. Remember to have Notes be the first one and label all of them. Label your second worksheet model Costco Hog Dog Combo and use it to answer the first two questions. 1. How much profit does Costco make on 150 million sales at $1.50 per sale using the costs and revenue per combo outlined above? 2. Build a one-way data table to show the profit when you vary the cost of ingredients by 2 cents from $1.00 to $1.20. Label a third worksheet model Costco Labor Breakeven and use it to show your work related to answering the third question. Copy the first worksheet into the second one to have the model you will use. 3. What would be the labor cost for Costco to break even once the ingredients cost $1.20? Format your cells so that formula results that involve money have a dollar sign and do not have more than two positions after the decimal point. Remember to use formatting best practices.

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Here is the workbook with three worksheets to answer the questions about the Costco hot dog combo Wo... View the full answer