The Pizza Stand
The stand will be located just outside the football stadium, making it accessible during the ball game. The location is also convenient for visitors as they tour the campus at other times during the weekend. An estimated 2,500 visitors will be on campus, in addition to the campus population of 1,500.
Each pizza requires:
1/2 lb. pizza flour
4 oz. pizza sauce
1/8 lb. Pepperoni
1/2 lb. Cheese A student organization has been given permission to operate a pizza stand during the upcoming homecoming weekend.
Pizza flour costs $8.00 per 10-lb. bag; pizza sauce, $4.80 per 64-oz. jar; pepperoni, $18.00 per 5-lb. package; and cheese, $15.00 per 5-lb. package. Club members will cook the pizzas and staff the stand on a volunteer basis. The university requires each vendor to pay a $25.00 permit fee and a $50.00 refundable deposit on the building. You also need to purchase a canopy for $100, a small oven for $200 and other supplies for $50. Your club plans to donate the profits from the pizza sales to a local children's hospital.
1. How many pizzas can you anticipate selling assuming that 10% of the attendees will buy a pizza?
2. How much of each raw material do you need to buy?
3. Calculate your Cost of Goods per pizza
Anticipate selling each pizza for $7.00. Create and show a basic Income Statement/P & L Assume your deposit will be refunded. WHAT IS YOUR NET PROFIT MARGIN?
4. Calculate your Break- Even point based on your expenses required for the event? Be sure to write the formula