HOMEWORK #4 BREAK EVEN ANALYSIS PROBLEM NEW ENGLAND SEAFOOD RESTAURANT HAS FIXED COSTS OF? _______ FIXED COSTS ARE: RENT $25,000 INSURANCE 5,000 UTILITIES 10,000 COMMUNICATION 5,000 DEPRECIATION 10,000 TAXES 5,000 CORE LABOR 15,000 REPAIRS AND MAINTENANCE 5,000 COST OF FOOD 12,000 COST OF WINE 4,000 LINEN EXPENSE 2,000 SALES PRICE IS DETERMINED BY WHAT THE RESTAURANT WANTS TO MARK UP THE BASIC COST OF PREPARING THE ITEM. 50% OF ALL SALES PER MONTH ARE CHAR GRILLED PORTERHOUSE STEAKS THAT SELL FOR $20.00 A LA CARTE. THE STEAKS HAVE A COST OF $10.OO EACH. WHAT IS THE FOOD COST % FOR MARK UP? 10.00 DIVIDED BY .50= $20.00 25% OF ALL SALES ARE WHOLE BAKED LOBSTER THAT SELL FOR $32.00 PER A LA CARTE THAT HAVE A COST OF $16.00. 50% MARK UP AS WELL. 25% OF ALL SALES ARE STEAMED ALASKAN CRAB LEGS THAT ARE SOLD FOR $38.00 PER ORDER THAT COST $18.00. DIVIDED BY .48= 38.00 ALL STEAKS ARE SOLD WITH A JUMBO BAKED POTATO WITH ALL CONDIMENTS FOR $2.00 ADDITIONAL THAT HAS A FOOD COST OF $1.00 ALL LOBSTER AND CRAB ORDERS HAVE RICE PILAF WITH SAUTED WILD MUSHROOMS AT $3.00 PER ORDER THAT HAVE A FOOD COST OF $1.00 ALL COME WITH A GLASS OF WINE SOLD FOR $3.00 PER GLASS THAT HAS A COST OF 1.00. HOW MANY ORDERS OF LOBSTER HAVE TO BE SOLD___________________? HOW MANY ORDERS OF STEAK_____________________________________? HOW MANY ORDERS OF CRAB LEGS____________________________________________? HOW MANY BAKED POTATOES_____________________________________ HOW MANY ORDERS OF RICE PILAF____________________________________? HOW MANY GLASSES OF WINE__________________________?

Fixed cost
RENT 25000
INSURANCE 5000
UTILITIES 10000
COMMUNICATION 5000
DEPRECIATION 10000
TAXES 5000
Labor 15000
REPAIRS 5,000
COST-food 12000
COST-Wine 4,000
LINEN 2,000
98000
Total fixed cost: $ 98000
We get the weighted share of profit:
Share*Margin
Share Item Cost Sale Price Margin Weighted margin
50% CHAR GRILLED PORTERHOUSE STEAKS 10 20 10 5
25% WHOLE BAKED LOBSTER 16 32 16 4
25% STEAMED ALASKAN CRAB LEGS 18 38 20 5
50% JUMBO BAKED POTATO 1 2 1 0.5
(25+25)% 50% RICE PILAF WITH SAUTED WILD MUSHROOMS 1 3 2 1
100% GLASS OF WINE 1 3 2 2
17.5
17.5 n = 98000 For Break even
n= 5600
Share*Margin (Share*n)
Share Item Cost Sale Price Margin Weighted margin Units sold
50% CHAR GRILLED PORTERHOUSE STEAKS 10 20 10 5 2800
25% WHOLE BAKED LOBSTER 16 32 16 4 1400
25% STEAMED ALASKAN CRAB LEGS 18 38 20 5 1400
50% JUMBO BAKED POTATO 1 2 1 0.5 2800
(25+25)% 50% RICE PILAF WITH SAUTED WILD MUSHROOMS 1 3 2 1 2800
100% GLASS OF WINE 1 3 2 2 5600
17.5
17.5 n = 98000
n= 5600
So
Item Units sold
CHAR GRILLED PORTERHOUSE STEAKS 2800
WHOLE BAKED LOBSTER 1400
STEAMED ALASKAN CRAB LEGS 1400
JUMBO BAKED POTATO 2800
RICE PILAF WITH SAUTED WILD MUSHROOMS 2800
GLASS OF WINE 5600
 
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