SWU Food and Beverage

south University (SWU), located 30 miles southwest of the D bothas/ gird Worth metroplex, has witnessed tremendous growth in its pickball program. With that growth, fueled by the hiring of fabled coach Bo Pitterno, has come more fame, the penury for a bigger stadium, and more complaints just roughly seating, pose, long lines, and concession stand prices.Southwestern Universitys president, Dr. Marty Starr, was non only concerned about the constitute of expanding the existing stadium versus building a in the raw stadium, but also about the ancillary activities. He wants to be authoritative that these various support activities generate gross adequate to pay for themselves. Consequently, he wants the parking lots, game programs, and sustenance service to all be handled as profit centers. At a recent meeting discussing the new stadium, Starr told the stadium manager, Hank Maddux, to develop a break-even map and related data for all(prenominal) of the centers.He instructed Ma ddux to make believe the solid food service area break-even piece ready for the next meeting. After tidings with other facility managers and his subordinates, Maddux developed the put off below. This table shows the expected percent of taxation by item, the suggested selling prices, and his estimate of varying costs.Selling Variable Percent ItemPrice/UnitCost/UnitRevenue Soft beverage$1.50 $ .75 25% Coffee 2.00 .50 25% calorifacient dogs 2.00 .80 20% Hamburgers 2.50 1.00 20% Misc. snacks 1.00 .40 10%Madduxs frosty costs are interesting. He estimated that the prorated put of the stadium cost would be salaries for food services at $100,000 ($20,000 for each of the quintuplet home games) 2,400 square feet of stadium quadruplet at $2 per square foot per game and six people in each of the six booths for 5 hours at $7 an hour. These fixed costs lead be pro mintately allocated to each of the products ground on percentages provided in the table. For example, the revenue from kooky drinks would be expected to cover 25% of the total fixed cost.Maddux wants to be for sure that he has a number of things for acid seat Starr 1, the total fixed cost that moldiness(prenominal) be covered at each of the games. 2, the portion of the fixed cost that must be covered at each of the games/ 3, what his unit sales would be at break-even for each items- that is, what sales of soft drinks, coffee, hot dogs, and hamburgers are necessary to cover the portion of the fixed cost allocated to each of these items. 4, what the dollar sign sales for each of these would be at these break-even points, and 5, realistic sales estimates per attendee for attendance of 60,000 and 35,000 (in other words, he wants to know how many a(prenominal) dollars each atendee is spending on food at his projected break-even sales at present and if attendance grows to 60,000).He felt this populate piece of breeding would be encouraging to understand how realistic the assumptions of his model are, and this information could be compared with similar figures from previous seasons.DISCUSSION QUESTIONPrepare the say with the items noted so it is ready for Dr. Starr at the next meeting.