Question

A vendor sells hotdogs at $15.00 /piece. For every hot dog, he spends $11.89 in the raw material. Additionally, he spends $1.02 for packing each hotdog and monthly $46.00, $23.00, $13.00 as food truck rent, electricity and other expenses respectively. How much is the vendor contributing to covering his fixed costs or generating profits?

Answer 1

Solution: Statement of $11.89 Requirement: How much is the vendor contributing to covering his fired cats or generating profits? Contribution Mergin per unit Selling Paire per unit $15 Less: Raw Material per unit Less: Parking Cost per mit $ 1.02 Contribution Margin per unit Ansuer & The vendor contributing to covering his fixed costs or generating profits as $2.00 per piece of hotdog. $2.09