SWU Food and beverage
Southwestern University (SWU), located 35 miles south west of the Dallas/Fort Worth metroplex, has witnessed tremendous growth in its soccer program. With this growth, fueled by the hiring of renowned coach Bo Pitterno, comes more fame, the need for a bigger stadium, plus more complaints about seating, parking, extended lines, and concession stand prices. Southwestern Universitys president, Doctor Marty Starr, was not only concerned about the price tag on expanding the present stadium versus building a fresh stadium, although also regarding the ancillary activities. This individual wants to make sure that these several support activities generate revenue adequate to fund themselves. Subsequently, he wishes the parking lots, game applications, and meals service to all be handled since profit centers. At a newly released meeting speaking about the new arena, Starr informed the stadium manager, Hank Maddux, to build up a break-even chart and related data for each from the centers. He instructed Maddux to have the foodstuff service place break-even statement ready for another meeting. After discussion to facility managers and his subordinates, Maddux created the desk below. This table shows the expected percent of revenue simply by item, the suggested selling prices, and his estimation of adjustable costs.
Offering Variable Percent
Gentle drink$1. 40 $. seventy five 25%
Caffeine 2 . 00. 50 25%
Hot puppies 2 . 00. 80 twenty percent
Hamburgers installment payments on your 50 1 . 00 twenty percent
Misc. snacks 1 . 00. 40 10%
Madduxs fixed costs will be interesting. This individual estimated which the prorated area of the stadium cost would be: salaries intended for food providers at hundred buck, 000 ($20, 000 for each and every of the five home games); 2, 400 square feet of stadium space at $2 per rectangular foot per game; and six people in each of the six booths for a few hours at $7 an hour or so. These set costs will probably be proportionately invested in each of the products based on proportions provided in the table. For instance , the income from sodas would be likely to cover 25% of the total fixed price....