A management accounting problem solving question

Question

Per Month

Monthly fixed expenses:

- Wages of part - time cook $2400

- Other $720

Total $3120

Per Hamburger

Variable Expenses

-Rolls $0.24

-Meat $0.80

-Other $0.36

Total $1.40

Selling Price of $2.20 per hamburger. assuming a 30 day month

At the end of two months, 3600 hamburgers have been sold, what is the net profit before tax?

Answer 1

ok, your profit per burger is 0.80

0.80 x 3600 burgers sold is 2,880

your money going out is 3,120 per month so 2 months is 6,240

therefore you have made a net loss in those 2 months of 3,360

get rid of the chef and cook them yourself and you could have made a profit