Question:
Wimpee"s Hamburger Stand sells the Super Tuesday Burger for $3.00. The variable cost per hamburger is $1.75; total fixed cost per month is $25,000.
Required
1. How many hamburgers must Wimpee"s sell per month to break even?
2. How many hamburgers must Wimpee"s sell per month to make $6,000 in operating income?
3. Prepare a CVP graph for Wimpee"s.
4. Assuming that the most hamburgers Wimpee"s has ever sold in a month is 21,000, how likely is Wimpee"s to achieve a target operating income of $6,000? What actions could Wimpee"s manager take to increase the chances of reaching that target operating income?