Calculate the average number of customers per hour must visit your store before you start making profit

Explain the meaning of variance analysis and discuss the most commonly derived variances
December 25, 2020
Calculate the cost of Job 845 using ABC to assign the overhead costs.
December 25, 2020

You are considering opening a dollar store in which each item sells for $1. A franchise that provides the merchandise and stock it on your shelves costs $50,000/year the monthly rent is $3000. You need to hire 4 people to work on 4 cash registers and 2 people to help customers and to organize the store. The hourly rate for each of your employees is $15/hour including benefits and you intend to open the store 8 hours a day,7 days a week. You can assume that a monthis 30 days. and there is no shortage of people to work over weekends at the same rate of$15/hour. Suppose that, on average, a customer is expected to buy $5 worth of items she s/he visits the store. Answer the following and show your calculations:

a) To determine the feasibility of the project, calculate the average number of customers per hour must visit your store before you start making profit

b)Suppose that the margin of error for the demand estimate of $5 per customeris20%. How does this affect your solution in (a).