Case Study Food and Beverage at Swu Football

In: Business and Management

Submitted By jmlexie
Words 704
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Discussion Question 1
Dr. Marty Star,
Please see the below report and calculations regarding Food and Beverage Services at Southwestern University Football games. 1. Total fixed cost that must be covered at each of the games are:
Food service salaries = $20,000
Rental fees = 2,600 x $3 = $7,800
Booth worker wages = 6 x 6 x 5 x $10 = $1,800
Total fixed cost per game = $20,000 + $7,800+ $1,800 = $29,600

2. The portion of the fixed cost allocated to each of the items is shown in the table below:

| Percent | Allocated fixed | Item | revenue | cost | Soft drink | 25% | $7,400 | Coffee | 20% | $5,920 | Hot dogs | 20% | $5,920 | Hamburgers | 20% | $5,920 | Popcorn | 10% | $2,960 | Misc. snacks | 5% | $1,480 | | | $29,600 |

3. The break-even points for each item are calculated by computing the allocated fixed cost for each item divided by the profit margin of each item. These are shown in the table below: | Selling | Variable | Profit | Percent | Allocated | Break even | Item | price | cost/ unit | margin | revenue | fixed cost | volume | Soft drink | $2.50 | $0.65 | $1.85 | 25% | $7,400 | 4,000.00 | Coffee | $2.00 | $0.40 | $1.60 | 20% | $5,920 | 3,700.00 | Hot dogs | $2.50 | $1.20 | $1.30 | 20% | $5,920 | 4,553.85 | Hamburgers | $3.00 | $1.40 | $1.60 | 20% | $5,920 | 3,700.00 | Popcorn | $3.00 | $1.90 | $1.10 | 10% | $2,960 | 2,690.91 |

4. The dollar sales for each item at their break-even points are shown in the table below:

| Selling | Break even | Dollar volume | Item | price | volume | of sales | Soft drink | $2.50 | 4,000.00 | $10,000.00 | Coffee | $2.00 | 3,700.00 | $7,400.00 | Hot dogs | $2.50 | 4,553.85 | $11,384.62 | Hamburgers | $3.00 | 3,700.00 | $11,100.00 | Popcorn | $3.00 | 2,690.91 | $8,072.73 | Misc. snacks | $1.50 |…...

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