Question

A local food truck specializes in gourmet grilled cheese sandwiches. Each month, the owners of the truck have a constant total of $7,900 in expenses (salaries, truck loan, etc.) and it costs $1.70 per sandwich to make each sandwich. The food truck sells its sandwiches for $7.75 each.

Answer 1

Answer:

Results are below.

Step-by-step explanation:

Giving the following information:

Fixed costs= $7,900

Unitary cost per sandwich= $1.7

Selling price per unit= $7.75

To calculate the break-even point in units and dollars, we need to use the following formula:

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 7,900 / (7.75 - 1.7)

Break-even point in units= 1,306 sandwiches

Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point (dollars)= 7,900 / (6.05 / 7.75)

Break-even point (dollars)= $10,120