A sandwich shop has been doing business for 10 years in Pinecrest. The shop currently operates out of a building that is paid for. The variable overhead expenses are 10% of the sales each sandwich. Each sandwich has a food cost of $1. All the sandwiches sell for $5 each.
At the new location in the Falls area, the monthly cost of rent will be $6,000. The sales price will also be $5, with a food cost of $1 and 10% overhead expense of price of each sanchwich sold.
a) What is the break even in dollars and
b) Units for the new location?
c) How much will the new shop need to sell to generate a monthly profit of $12,000?