Tony’s Hot Dog Stand 1. 1,600 people per day pass stand; 1 of 4 buy 2. ¼ buy=conversion...

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Tony’s Hot Dog Stand
1. 1,600 people per day pass stand; 1 of 4buy
2. ¼ buy=conversion rate=25%
3. Cogs=$.25
4. Avg. customer buys 2 tube steaks @$1each
5. Cost of tube steaks - $.25 each
6. Customer buys 1x/day
7.   Fixed Costs - $36K Tony salary; $12Kdepreciation ((he bought the stand for $60,000/5=12,000) So thetotal fixed cost is $48,000)
8. Business Days – 250 per year
9. Sales (Revenue) is $200,000
10. Variable Cost is $50,000
11. Fix Cost is $48,000

Now we need to calculate Tony’s Break-Even....For Tony,this is a number he wants to know every day. Calculating theBreak-Even for the Hot Dog Stand BE =  FC/GM%
Yearly Break Even = ____                   FC= _ GM% = _%
Monthly Break-Even = ___          FC =_ GM% =%
Daily Break Even = ___           FC= _ GM % =___ %

How did you calculate the breakeven?
What does this actually mean? Tony has to sell _ hotdogs per day just to stay in business, anything after that isprofit!
What is Tony’s Net Profit (year) (This is the stuff youwant)?

Answer & Explanation Solved by verified expert

4.4 Ratings (603 Votes)

Part A The value of GM is calculated as under GM Yearly Total Sales Value Total Variable CostTotal Sales Value 200000 50000200000 75 GM Monthly will remain same at 75 assuming equal volume of sales per month GM See Answer

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Tony’s Hot Dog Stand1. 1,600 people per day pass stand; 1 of 4buy2. ¼ buy=conversion rate=25%3. Cogs=$.254. Avg. customer buys 2 tube steaks @$1each5. Cost of tube steaks - $.25 each6. Customer buys 1x/day7. Fixed Costs - $36K Tony salary; $12Kdepreciation ((he bought the stand for $60,000/5=12,000) So thetotal fixed cost is $48,000)8. Business Days – 250 per year9. Sales (Revenue) is $200,00010. Variable Cost is $50,00011. Fix Cost is $48,000Now we need to calculate Tony’s Break-Even....For Tony,this is a number he wants to know every day. Calculating theBreak-Even for the Hot Dog Stand BE = FC/GM%Yearly Break Even = ________ FC= _______ GM% = _______%Monthly Break-Even = ___________ FC =_______ GM% =________%Daily Break Even = _____________ FC= _______ GM % =_______ %How did you calculate the breakeven?What does this actually mean? Tony has to sell ___ hotdogs per day just to stay in business, anything after that isprofit!What is Tony’s Net Profit (year) (This is the stuff youwant)?