1. A vendor prepares 100.00 hotdogs every day and sells at $20.00 /piece. For ea
ID: 2818426 • Letter: 1
Question
1. A vendor prepares 100.00 hotdogs every day and sells at $20.00 /piece. For each hot dog, he spends $11.00 in the raw material. Additionally he spends $0.85 for packing each hotdog and monthly $45.00, $24.00, $13.00 as food truck rent, electricity and other expenses respectively. On a particular day in June 101.00 people came wanting the hotdog. Vendor thinks $4.00 per lost sale. Determine vendor’s profit for that day? Assume there are 30 days in the month.
2. For a table manufacturing company, selling price for a table is $57.00 per Unit, Variable cost is $18.00 per Unit, labor charge is $10.24 per Unit, rent is $529.00 per month and transportation is $10 per 10 tables. If 50 tables are sold in a month how much is the fixed cost for that month?
3. You run a hospital with 100 rooms. Fixed daily cost is $932.00 which includes staff salary, property charges, maintenance etc. Variable cost per room is $13.00 which includes cleaning, equipment rentals, utility cost etc. which is incurred only when the room is full. You charge $59.00 per room per day. You sold 40.00 rooms today, how much profit/loss did you earn for today.
Explanation / Answer
Solution:-(a) No. of hotdogs produced daily 100 Cost of Raw Material 11 Packing Cost of Hotdog 0.85 Total Variable Cost 11.85 Rent Expense 45 Electricity Exps. 24 Other Exps 13 Total Fixed Expenses 82 No. of days 30 Fixed Exp of each day 2.73 Total Sale Value of a day 100*20 2000 Less :- Variable Costs 11.85*100 1185 Less :- Fixed Cost 2.73 Less :- Cost of lost sale 4 Therefore Vendors profit for that day 808.27 Solution (b) Here only the Cost of Rent is the Fixed cost that is clearly given so the Fixed Cost for that month is $529 Solution © Total No. of Rooms 100 Room sold today 40 Variable cost per room $13 Total Variable Cost 40*13 520 Fixed Cost per day 932 Room Rent per day $59 Total Rent received 59*40 2360 Less:- Fixed Cost 932 Less:- Variable Cost 530 Therefore Profit Earned Today 898
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