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The owner of Fat Mans Sausage Cart is concerned because the stand has been averaging

The owner of Fat Man's Sausage Cart is concerned because the stand has been averaging only 5,500 sausage sales per month, the stand and staff can make 7,000 sausage on a bun per month. The variable cost of each sausage ( buns, meat etc) is $3.50. Monthly fixed costs are ( taxes, licences, space rent and salaries) are $10,000. The owner (Big Bob) believes he could sell 7,000 sausages per month if he cuts the sales price from $7.50 to $7.00 per sausage. How much extra profit ( above the current level) would he generate if he decreased the sales price?

33) The owner of Spicy's Gourmet Popcorn is concerned because the stand has been averaging sales of only 7,500 cartons per month, the stand and staff can make 15,000 cartons of popcorn per month. The variable cost of each carton is $1.50. Monthly fixed costs are ( taxes, licences, space rent and salaries) are $10,000. The owner wants cost information about different volumes so that he can make some operating decisions.

Required: Fill in the following chart to provide Bob with the information he wants.

Monthly carton sales7,50010,00015,000

Total fixed Costs$__________$__________$__________

Total variable cost$__________$__________$__________

Total costs$__________$__________$__________

Fixed cost per carton$__________$__________$__________

Variable cost per carton$__________$__________$__________

Average cost per carton$__________$__________$__________

Sales price per carton$5.50$5.50$5.50

Average price per  carton$__________$__________$__________

34) The owner of Spicy's Gourmet Popcorn is concerned because the stand has been averaging sales of only 7,500 cartons per month, the stand and staff can make 15,000 cartons of popcorn per month. The variable cost of each carton is $1.50. Monthly fixed costs are ( taxes, licences, space rent and salaries) are $10,000. The owner believes he could sell 15, 000 cartons per month if he cuts the sales price from $57.50 to $5.00 per carton. How much extra profit ( above the current level) would he generate if he decreased the sales price?

Dec 07 2019 View more View Less

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