To prepare for his university football games, Hank Maddux, the stadium manager, wants to prepare a...

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To prepare for his university football games, Hank Maddux, the stadium manager, wants to prepare a break-even report for his next meeting with his president. Below is the data he gathered from the food service area. | ITEM Selling Price/Unit Variable Cost/Unit Soft drink $2.50 $1.75 Coffee $3.00 $1.50 Hot dogs Hamburgers Misc. snacks $3.00 $0.80 $3.50 $1.00 $2.00 $0.40 The total fixed cost per game includes salaries, rental fees, and cost of the workers in the six booths. These are: Salaries: $20,000 per game Rental fees: 2,400 square feet of stadium space at $2 per square foot per game Booth worker wages: there are 6 booths; each booth has six workers; each worker works for 5 hours at $10 an hour. Please help Hank Maddux answer the following questions as part of his report. a) What is the total fixed cost for each game? [3] b) Based on historical sales data, the revenue from Soft drink is expected to cover 25% of the total fixed cost for each game. What is the amount of the fixed cost allocated to Soft drink? [2] c) How many soft drinks should be sold to cover this portion of the fixed cost (i.e., the break-even volume)? [3] d) If the total sales from all 5 items (soft drink, coffee, hot dogs, hamburgers, Misc. snacks) must be $50,000 each game to break-even and the projected attendance is 35000 people, how much each person would have to spend on food and beverages? Should Hank Maddux be confident that this food and beverage operation will at least break even? [2] To prepare for his university football games, Hank Maddux, the stadium manager, wants to prepare a break-even report for his next meeting with his president. Below is the data he gathered from the food service area. | ITEM Selling Price/Unit Variable Cost/Unit Soft drink $2.50 $1.75 Coffee $3.00 $1.50 Hot dogs Hamburgers Misc. snacks $3.00 $0.80 $3.50 $1.00 $2.00 $0.40 The total fixed cost per game includes salaries, rental fees, and cost of the workers in the six booths. These are: Salaries: $20,000 per game Rental fees: 2,400 square feet of stadium space at $2 per square foot per game Booth worker wages: there are 6 booths; each booth has six workers; each worker works for 5 hours at $10 an hour. Please help Hank Maddux answer the following questions as part of his report. a) What is the total fixed cost for each game? [3] b) Based on historical sales data, the revenue from Soft drink is expected to cover 25% of the total fixed cost for each game. What is the amount of the fixed cost allocated to Soft drink? [2] c) How many soft drinks should be sold to cover this portion of the fixed cost (i.e., the break-even volume)? [3] d) If the total sales from all 5 items (soft drink, coffee, hot dogs, hamburgers, Misc. snacks) must be $50,000 each game to break-even and the projected attendance is 35000 people, how much each person would have to spend on food and beverages? Should Hank Maddux be confident that this food and beverage operation will at least break even? [2]

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a Total fixed cost per game Salaries Rental fees Booth worker wages Rental fees stadium space in squ... View the full answer