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Concession Supply sells hotdogs,buns,and nacho ingredients to several major league ballparks across the country.Currently,Concession Supply has the following pricing information for one case of hotdogs sold at Wrigley Field: Total fixed costs = $1,200,Selling price = $16,and Variable costs = $6.
-Refer to Scenario 19.1.If Concession Supply wanted to make a profit of $800 on each case,it would need to sell ____ cases.

Question

Quizplus · Accepted Answer

To make a profit of $800 on each case, the total profit per case must be $800 + $6 = $806. 
Therefore, the total revenue per case must be $1,200 + $806 = $2,006. 
Dividing the total revenue per case by the selling price per case gives the quantity of hotdog cases that need to be sold: $2,006/$16 = 125.375, which can be rounded up to 126 cases. 
However, this calculation only considers the hotdogs - we do not know the profit margins for the buns or nacho ingredients. 
Therefore, we need additional information to determine if selling 126 cases of hotdogs alone would allow Concession Supply to make a profit of $800 per case. 
Since answer choice E is the only one that matches our calculation for the hotdogs, it is the best choice.

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