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Assignment help 2861

I own and manage a pretzel and lemonade concession cart. I decide I want to sell my products at a NASCAR race weekend. I have two rental options:

option 1- pay a commission of 30% of total sales

option 2- pay a fixed rent of $1000 for the entire weekend

other information: food and beverage cost of sales run at 20%. I will also need to pay an employee $400 to run the cart.

question 1: calculate breakeven point for each option.

question 2: estimation of sales for weekend is $2800. calculate operating leverage for each of the options.

question 3: there are 2 possibilities for sales over the weekend. the first is “average” or $2800. the second is “great” or $4200. calculate the profit potential for both options.

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