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. On a particular day in june it rained heavily so vendor was able to sell only 80.00 hot dogs. For finishing the stock he sold remaining hotdogs for $5.00/piece. Determine vendor's profit for that day? Assume there are 30 days in the month.

Answer 1

Selling Price per Hot Dog                               $59700

Cost of Rawmaterial                                         $36000

Packing Expense                                            $3000

Total Fixed Expense                                         $80

Profit for the Month                                        $20620

Calculation of Sales

100 Hotdogs Sold Per Day*29 Days*$20 Per Hot Dog...........................$58000

80 Hot Dogs sold on Rainy Day*$20 Per Hotdog.....................................$ 1600

20 Hot Dogs Sold*$5 Per hotdog....................................................................$100

Total Sales.............................................................................................................$59700

Calculation of Raw Materials

3000 Hotdogs *$12.................................................................$36000

Packing Expense

3000 Hotdogs*$1.......................................................................$3000

Profit for the Day:

Sales...................................................................................................$1700

Cost of RM........................................................................................($1200)

Packing Exp.....................................................................................($100)

Contribution........................................................................................$400

Less Fixed Expense..........................................................................$2.67

Profit for the day...............................................................................$397.33

Fixed Expense per day= $80/30 days

                                        =2.67 per day.

Answer 2

Answer:

The vendor's profit for that day was $ 397.4

Explanation:

From the question given,we determine vendor's profit for that day

The profit of the vendor for that day is calculated as shown below:

= ( Sales value - variable cost ) + sale value of leftover units - fixed cost per day

Sales value is computed as follows:

= ( 100 units - 20 units ) x $ 20 per unit

= $ 1,600

Variable cost is computed as follows:

= 100 units x ( $ 12 + $ 1 )

= $ 1,300

The  Sale value of leftover units is computed as follows:

= 20 units x $ 5

= $ 100

The fixed cost per day is calculated as follows:

= Food truck rent + electricity + other expenses

= ($50 + $20 + $10) / 30

= $ 2.6 Approximately

So by plugging these values in the above mentioned formula, we shall get vendor's profit as:

= ( $ 1,600 - $ 1,300 ) + $ 100 - $ 2.6

= $ 397.4