{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Meehan assignment 4 - Terry Meehan MGMT 100-E59 Assignment...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Terry Meehan MGMT 100-E59 Assignment 4 p. 399, #3 The most important part of any business venture is being certain you will make a profit. The scenario on page 399 involves a school fund raiser where students sell pizza. When considering the profitability of this, or any, venture, one must take into consideration the break even point. This is the point where revenues are in equilibrium with costs. The break even point is calculated as follows: Break Even Point (BEP)= Total Fixed Cost (FC) _____________________________________ [Price of One Unit (P) – Variable Cost (VC)] In the example provided, the only fixed cost is the purchase price of the pizza oven, $12,000.00. The price of one unit is the sale price, $12.00, and the variable cost is $6.00. Therefore, the break even point for the student run pizza selling venture is 2000 units. That is to say, the student body would have to sell 2000 pizzas just to break even. Assuming a student body of 2500 students, with approximately 25% of them actively participating in the fund raiser, the students would have to sell just over 3 pizzas each just to cover expenses.
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern