Question

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.

Answer 1

Answer:

Total profit=  $397.33

Explanation:

Giving the following information:

A vendor prepares 100.00 hotdogs every day and sells at $20.00/piece.

For each hot dog:

$12.00 in the raw material.

$1.00 for packing each hotdog

Monthly

$50.00 on truck rent.

$20.00 on electricity.

$10.00 on other expenses.

Total= 80

Lost sale is 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

Sales= 80*$20+20*$5= $1700

Variable costs= (12*100+1*100)= 1300

Fixed costs= $80/30= 2.67

Total profit= 1700 - 1300 - 2.67= $397.33