I need help determining the break-even sales for the following information. Sale
ID: 2647750 • Letter: I
Question
I need help determining the break-even sales for the following information.
Sales
975 parties at $385 average per party
$375,000
Occupancy Cost
Rent, utilities, maintenance
$35,000
Labor
High school staff to work parties
$100,000
Party Supplies
Cupcakes, costumes, toys
$30,000
Advertising
Internet ads, Direct Mail
$45,000
Miscellaneous
Gas, phone, computer, office supplies
$20,000
Gross Profit
Before taxes, owners draw
$145,000
I also need help determingin the break-even sales on intital investment if the business decides to add a new location.
INITIAL INVESTMENT:
BUILD OUT COST
$74,554
HIRING/TRAINING COST
$100,000
ADVERTISING & PROMOTION
$45,000
PROJECTED INVESTMENT
$219,554
Sales
975 parties at $385 average per party
$375,000
Occupancy Cost
Rent, utilities, maintenance
$35,000
Labor
High school staff to work parties
$100,000
Party Supplies
Cupcakes, costumes, toys
$30,000
Advertising
Internet ads, Direct Mail
$45,000
Miscellaneous
Gas, phone, computer, office supplies
$20,000
Gross Profit
Before taxes, owners draw
$145,000
Explanation / Answer
Answer:
Break Even Sales (Units) = Total Fixed Costs / (Sales Price
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