A drive in movie theater has been selling popcorn, and the small concession stand has normally reported a monthly profit of $18,000 on sales of $48,000, fixed costs are currently about $18,000, and variable costs of $0.80 per popcorn order. Next year, the company plans to start selling pretzels for $4 each. Pretzels will have a variable cost of $0.92 and new equipment and personnel to produce nachos will increase monthly fixed costs by $7,288.80. Initial sales of pretzels should total 3,000 units per month. Determine the monthly break-even sales during the first month of pretzel sales, assuming a constant sales mix of 1 unit of pretzels and 3 units of popcorn.
A drive in movie theater has been selling popcorn, and the small concession stand has normally reported a monthly profit of $18,000 on sales of $48,000, fixed costs are currently about $18,000, and variable costs of $0.80 per popcorn order. Next year, the company plans to start selling pretzels for $4 each. Pretzels will have a variable cost of $0.92 and new equipment and personnel to produce nachos will increase monthly fixed costs by $7,288.80. Initial sales of pretzels should total 3,000 units per month.
Determine the monthly break-even sales during the first month of pretzel sales, assuming a constant sales mix of 1 unit of pretzels and 3 units of popcorn.
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