Break-Even Point - Finance/Accounting

Oct 2nd, 2015
Anonymous
Category:
Accounting
Price: $5 USD

Question description

You are a marketing director for a Mexican Taco Restaurant located in Lynchburg, VA. The average order size of your customers is $7.00 per order. That means that when all your food orders are divided by your total number of customers, the average order amount is $7.00.

Your variable cost per order is $3.00 in food costs and paper products. Of course, there are also fixed costs (whether you sell one or a hundred). These include your building lease ($2,000 per month, electricity $500 per month, and labor $3,100 per month)


Using this formula, what is the break-even point? In other words, how many meals, at $7.00, would need to be sold before you start making a profit?


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(Top Tutor) josep23
School: Duke University

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