Question

1.)A vendor prepares 100.00 hotdogs every day and sells at $18.00 /piece. For each hot dog, he spends $12.00 in the raw material. Additionally he spends $1.81 for packing each hotdog and monthly $46.00, $21.00, $12.00 as food truck rent, electricity and other expenses respectively. Lost sales are charged at $6.00 per lost sale. Leftover hotdogs can be sold for $3. On a particular day in June 111.00 people came wanting to buy a hotdog. Determine the vendor’s profit for that day? Assume there are 30 days in the month.

2.) A vendor prepares 100.00 hotdogs every day and sells at $20.00/piece. For each hot dog, he spends $12.00 in the raw material. Additionally he spends $1.00 for packing each hotdog and monthly $50.00, $20.00, $10.00 as food truck rent, electricity and other expenses respectively. Lost sale are taken as $1 per unhappy customer. Leftover hotdogs can be sold for $5.00/piece. On a particular day in June it rained heavily so the vendor was able to sell only 80.00 hot dogs. Determine the vendor’s profit for that day? Assume there are 30 days in the month.

3.You run a school in Florida. Fixed monthly cost is $5,866.00 for rent and utilities, $6,449.00 is spent in salaries and $1,724.00 in insurance. Also every student adds up to $99.00 per month in stationary, food etc. You charge $604.00 per month from every student now. You are considering moving the school to another neighborhood where the rent and utilities will increase to $11,119.00, salaries to $6,674.00 and insurance to $2,249.00 per month. Variable cost per student will increase up to $152.00 per month. However you can charge $1,130.00 per student. At what point will you be indifferent between your current mode of operation and the new option?

Answer 1

Answer 1)  

A Vendor prepares 100 hot Dog
Selling price $/hotdog	18
Raw material cost $/ Hot dog	12
Add- packing cost per hotdog $/ hotddog	1.81
Variaable cost $ / Hotdog	13.81
Fixed cost	Amnt-$
Food Truck Rent	46
Electricity	21
Other expenses	12
Total Fixed cost	79
Per day Fixed cost - 30 days a month	2.63	($79/30)
Per day production Hot Dog	100
Demand in One particular date - Hotdog	111
They lost on sales (111-100)	11	Hot dog
Per day lost on Sale $ 3/ hot dog -11*3=$/ hotdog	33
We need to derived how much profit they made
per day
Sale Quantity * ( Sales price - variable cost )- fixed cost per day - loss made per days)
(100 unit *($18-$13.81))-($2.63-$ 33)
Sales Price / per day / per Hot dog	18
Variable cost / per day / per Hot dog	13.81
Contribution / per day / per Hot dog$	4.19	a
Number of Hot dog sale\	100	b
Contrbution Margin per day per hot dog $	419	(a*b)
Less -
Fixed cost per day per hot dog $	2.63
Loss per day per hot dog $	33
Net Profit per hot dog per day $	383.37

Answer 2

A Vendor prepares 100 hot Dog
Selling price $/hotdog	20
Raw material cost $/ Hot dog	12
Add- packing cost per hotdog $/ hotddog	1
Variaable cost $ / Hotdog	13
Fixed cost	Amnt-$
Food Truck Rent	50
Electricity	20
Other expenses	10
Total Fixed cost	80
Per day Fixed cost - 30 days a month	2.67	($80/30)
Per day production Hot Dog	100
Sale made in two phase - One @ 80 hotdog
and others @ 20 hotdog
Sale price	Amnt-$
80 hot dog @ $ 20/ hot dog	1600
20 hot dog @ $ 5/ hot dog	100
Sale value of 100 hot dog	1700
Less - variable cost
100 hot dog @ $ 13/ hot dog	1300
Contribution / per day / $	400
Less Fixed cost per day as calculated above	2.67
Net Profit per hot dog $	397.33

Answer 3

Present Situation
Fixed cost	Amnt($)
Rent / Utilities	5,866
Salaries	6,449
Insurance	1,724
Total fixed cost	14,039
Monthly charge from Student $	604
Every stident add up monthly basis	99
Future Situation Would be
Fixed cost	Amnt($)
Rent / Utilities	11,119
Salaries	6,674
Insurance	2,249
Total fixed cost	20,042
Monthly charge from Student $	1,130
Every stident add up monthly basis	152
On the above data we need to calculate - INDIFFERENT Point
Assume Indifferent Point Y
" $604Y- ($14039+99y) = $1130Y - ($20042+152Y)
$604Y-99Y-$1130 Y+$152Y = -$20042+$14039
Y(604-99-1130+152)==   -$6003
-473 Y= - $ 6003
SO Finally Y = $6003/473== 12.69
So $ 13 ( approx) woud be indifferent between current and future situation