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. Ad
ditionally 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
$397.34 (if he sold the 20 leftover hot dogs), $297.34 if he didn't.
Step-by-step explanation:
We are going to assume that a month has 30 days.
First, we are going to see how much money the vendor got from selling the 80 hot dogs. He sold 80 hot dogs at 20 dollars/piece = 1600 dollars.
We need to subtract the amount of money he spent in each hot dog (12 dollars in raw material plus one dollar for packing): 13 dollars x 100 hot dogs he prepared = 1300 dollars
He also spends a total of 80 dollars per month in truck rent, electricity and other expenses. If we divide this by the amount of days per month we have: 80/30 = 2.66
The problem doesn't tell us that there were unhappy customers that day so that amount is zero.
We are going to assume that the vendor sold the remaining 20 hot dogs at 5 dollars/piece. 20 x 5 = 100.
Thus, the profit for that day is:
1600 - 1300 - 2.66 + 100 = 397.34
<u>(</u><u>Note:</u><u> If the vendor did not sell the leftover hot dogs and he actually only sold 80 hot dogs, then the profit would be: 1600 - 1300 - 2.66 = 297.34)</u>
