You are a marketing director for a Mexican Taco Restaurant

Scenario/Summary

You are a marketing director for a Mexican Taco Restaurant located in
Lynchburg, VA. The average order size of your customers is $7.00 per order.
That means that when all your food orders are divided by your total number
of customers, the average order amount is $7.00.

Your Role/Assignment

Your variable cost per order is $3.00 in food costs and paper products. Of
course, there are also fixed costs (whether you sell one or a hundred).
These include your building lease ($2,000 per month, electricity $500 per
month, and labor $3,100 per month).


Question



Check the interactive to answer the question below and submit the
deliverable for this assignment.

sing this formula, what is the break-even point? In other words, how many
meals, at $7.00, would need to be sold before you start making a profit?

Breakeven Point (number of meals) = Fixed Costs/(Average Order Price -
Average Order Cost).


The problem is that, even after being in business for a year, your
restaurant is selling slightly less than 1,000 meals. There are several
actions that can be taken to reach your break-even point, which is
necessary if you are to remain in business. As the marketing director is
responsible for the product, price, promotion, and placement, you control
many of the tools to make necessary adjustments.


Deliverable

The owner has a passion for this business and is willing to follow your
suggestion. He doesn’t want to lose the business and you certainly want to
keep your job. In a two-page proposal, please provide the break-even
formula and plug in the actual numbers to arrive at the correct answer.
State the problem and the articulate the possible solutions to solve your
stated problem. Here are some clues. You can increase revenue, decrease
expenses or some combination of both. Make sure to also describe pricing
constrains and why they must be considered within the proposed solution