+1-415-670-9189
info@expertsmind.com
What is the break-even point
Course:- Marketing Management
Length:
Reference No.:- EM13886118




Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Marketing Management

Using this formula, what is the break-even point? In other words, how many meals, at $7.00, would need to be sold before you start making a profit?

Breakeven Point (number of meals) = Fixed Costs/(Average Order Price - Average Order Cost).

The problem is that, even after being in business for a year, your restaurant is selling slightly less than 1,000 meals. There are several actions that can be taken to reach your break-even point, which is necessary if you are to remain in business.

As the marketing director is responsible for the product, price, promotion, and placement, you control many of the tools to make necessary adjustments. This is the scenerio You are a marketing director for a Mexican Taco Restaurant located in Lynchburg, VA.

The average order size of your customers is $7.00 per order. That means that when all your food orders are divided by your total number of customers, the average order amount is $7.00.

Your variable cost per order is $3.00 in food costs and paper products. Of course, there are also fixed costs (whether you sell one or a hundred). These include your building lease ($2,000 per month, electricity $500 per month, and labor $3,100 per month).

Answered:-

Verified Expert


Preview Container content

Breakeven point is the number of units that the company needs to sell in order to start making profits. It is a point where the company makes neither loses nor profits. For the Mexican Taco restaurant, the breakeven point is above 1000 units which the company is presently selling. With average order size of $7 and average order cost, which is also variable cost, of $3, the manager needs to find the breakeven point.




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Marketing Management) Materials
What is your overall impression at first glance after viewing the attached print advertisement. At this level, you will describe/list all objects, people, and environment wi
Select a product or service in which you have familiarity. Then, determine how the size and composition of the marketing program might require adjustment to gain a presence
Consider the buyer's value formula. Do you think Ben's pricing strategy will significantly increase value offered and thus help the hotel sell out? What impact will Ben's p
Begin your report with an External and Situational Analysis. Your focus should be on the Corporate Company and the new brand or product development extension or brand extensio
What opportunities in the marketing environment did Gannett seize in launching USA Today? How did the company learn about and respond to these opportunities? Answer the same
Conduct a risk assessment of the political-legal environment. Analyze potential risks and propose risk management strategies. Research information related to marketing and pro
The market for gasoline has changed in a couple significant ways over the last few years: new technologies have decreased the costs associated with producing gasoline, What
Let {En} be a sequence of Lebesgue measurable sets of real numbers.Prove that the set A of all those points that belong to infinitely many sets from the sequence {En} is Lebes