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Kelly's last year sales were $1,850,000. She knows from examining her income statement that her total (product) cost of sales last year was $647,500 and that her other variable costs were $555,000. The costs of staffing the bar would be an additional $200 for each of the two hours Kelly would be open.
Kelly wants to compute the sales volume necessary to justify staying open the additional two hours. Help Kelly make a good decision by completing the MSP worksheet she has developed, and then answer the questions that follow.
Crunchy's Campus Cantina MSP Worksheet
Last year sales$1,850,000100%Variable cost $555,000 %Minimum labor cost$Product cost % $647,500 %Minimum sales point$
- How much additional income each day would Kelly need to achieve to justify staying open for the additional two hours on Friday and Saturday?
- How much additional income each weekend would Kelly need to achieve to justify staying open for the additional two hours on Friday and Saturday?
