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Break-even point

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1. Cost-Volume-Profits and Vending Machines
Riccardo Food Services Company operates and services soft drink vending machines located in restaurants, gas stations, and factories in four southeastern states. The machines are rented from the manufacture. In addition, Riccardo must rent the space occupied by its machines. The following expense and revenue relationships pertain to a contemplated expansion program of 40 machines.

Fixed monthly expense follow:

Machine rental: 40 machines @ $53.50 $2,140
Space rental: 40 locations @ $38.80 $1,552
Part-time wages to service the additional 40 machines $2,008
Other fixed costs 300
Total monthly fixed costs $6,000
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This provides the steps to compute break-even point

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1. Cost-Volume-Profits and Vending Machines
Riccardo Food Services Company operates and services soft drink vending machines located in restaurants, gas stations, and factories in four southeastern states. The machines are rented from the manufacture. In addition, Riccardo must rent the space occupied by its machines. The following expense and revenue relationships pertain to a contemplated expansion program of 40 machines.

Fixed monthly expense follow:

Machine rental: 40 machines @ $53.50 $2,140
Space rental: 40 locations @ $38.80 $1,552
Part-time wages to service the additional 40 machines $2,008
Other fixed costs 300
Total monthly fixed costs $6,000

Per Unit Per $100 of Sales
Selling price $1.00 100%
Cost of snack .80 80
Contribution margin .20 20%

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