Using the data below, perform calculations. I need to understand the what the fo
ID: 2474841 • Letter: U
Question
Using the data below, perform calculations. I need to understand the what the formulas are so, please show and explain your work.
1.Group your fixed and variable costs
2.Calculate your break-even point in monthly sales
3. Determine your monthly sales needed to have a contribution margin of $10,000
4. Determine your net income/profit when you have a contribution margin of $10,000
5. Determine your margin of safety based on your monthly sales over the break-even sales.
Your new food service operation has the following expenses:
Salary $ 3,000.00 per month
Utilities $ 375.00 per month
Contract Services $ 575.00 per month
Advertising $ 190.00 per month
Rent $ 1,000.00 per month
Insurance $ 100.00 per month
Accounting and Legal fees $ 175.00 per month
Permits and Licenses $ 75.00 per month
Operating Supplies 10% of monthly sales
Hourly Wages 30% of monthly sales
Food Cost 25% of monthly sales
Explanation / Answer
1.Group your fixed and variable costs
Element Type Amount/Month Salary Fixed $3,000 Utilities Fixed $375 Contract services Fixed $575 Advertising Fixed $190 Rent Fixed $1,000 Insurance Fixed $100 Accounting and legal fees Fixed $175 Permits and licenses Fixed $75 Total fixed cost $5,490 Operating supplies Variable 10% of sales Hourly wages Variable 30% of sales Food cost Variable 25% of sales Total varaible cost 65.00%Related Questions
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