SWU Food and Beverage

Southwestern University (SWU), located 30 miles southwest of the Dallas/Fort worth metroplex, has witnessed tremendous growth in its football program. With that growth, fueled by the hiring of known coach Bo Pitterno, has come to a greater extent fame, the need for a bigger bowling ball, and more complaints about seating, parking, long lines, and concession stand prices.Southwestern Universitys president, Dr. Marty Starr, was not only concerned about the cost of expanding the existing stadium versus building a youthful stadium, but also about the ancillary activities. He wants to be positive(predicate) that these various support activities generate revenue adequate to pay for themselves. Consequently, he wants the parking lots, game programs, and food 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 chart and related data for severally of the centers.He instructed M addux to arouse the food service area break-even report ready for the next meeting. aft(prenominal) discussion with other facility managers and his subordinates, Maddux developed the table below. This table shows the judge percent of revenue by item, the suggested selling prices, and his estimate of variable cost.Selling variable star Percent ItemPrice/UnitCost/UnitRevenue Soft drink$1.50 $ .75 25% Coffee 2.00 .50 25% fervent dogs 2.00 .80 20% Hamburgers 2.50 1.00 20% Misc. snacks 1.00 .40 10%Madduxs fixed costs are interesting. He estimated that the prorated percentage of the stadium cost would be salaries for food services at $100,000 ($20,000 for each of the five home games) 2,400 square feet of stadium space 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 will be proportionately allocated to each of the products based on percentages provided in the table. For example, the revenue from soft drinks would be expected to cover 25% of the rack up fixed cost.Maddux wants to be sure that he has a number of things for death chair Starr 1, the total fixed cost that must be cover 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 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 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 stick up piece of information would be helpful to understand how realistic the assumptions of his pose are, and this information could be compared with similar figures fr om previous seasons.DISCUSSION QUESTIONPrepare the report with the items noted so it is ready for Dr. Starr at the next meeting.