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Food and Beverages at Southwestern University Football Games Southwestern University (SWU), a lar…

by | Apr 22, 2023 | Posted Assignments

Food and Beverages at Southwestern University Football

Southwestern University (SWU), a large state university in
Stephenville, Texas, 30 miles southwest of the Dallas/Fort Worth
metroplex, enrolls close to 20,000 students. The school is the
dominant force in the small city, with more students during fall
and spring than permanent residents.

A longtime football powerhouse, SWU is a member of the Big
Eleven conference and is usually in the top 20 in college football
rankings. To bolster its chances of reaching the elusive and
long-desired number-one ranking, in 2013 SWU hired the legendary
Billy Bob Dillon as its head coach. Although the number-one ranking
remained out of reach, attendance at the five Saturday home games
each year increased. Prior to Dillon’s arrival, attendance
generally averaged 25,000–29,000. Season ticket sales bumped up by
10,000 just with the announcement of the new coach’s arrival.
Stephenville and SWU were ready to move to the big time!

With the growth in attendance came more fame, the need for a
bigger stadium, and more complaints about seating, parking, long
lines, and concession stand prices. Southwestern University’s
president, Dr. Marty Starr, was concerned not only about the cost
of expanding the existing stadium versus building a new stadium.
Starr told the stadium manager, Hank Maddux, to develop a
break-even chart and related data for each of the centers.

He instructed Maddux to have the food service area break-even
report ready for the next meeting. After discussion with other
facility managers and his subordinates, Maddux developed the table
below showing the suggested selling prices, and his estimate of
variable costs, and the percent revenue by item. It also provides
an estimate of the percentage of the total revenues that would be
expected for each of the items based on historical sales data.

Maddux’s fixed costs are interesting. He estimated that the
prorated portion of the stadium cost would be as follows: salaries
for food services at $100,000 ($20,000 for each of the five home
games); 2,600 square feet of stadium space at $3.00 per square foot
per game; and six people per booth in each of the six booths for 5
hours at $10 an hour. These fixed costs will be proportionately
allocated to each of the products based on the percentages provided
in the table. For example, the revenue from soft drinks would be
expected to cover 25% of the total fixed costs.


Selling Price/unit

Variable Cost/unit

Percent Revenue

Soft drink








Hot dogs












Misc. snacks




Maddux wants to be sure that he has a number of things for
President Starr:

The total fixed cost that must be covered at each of the

The portion of the fixed cost allocated to each of the

What his unit sales would be at break-even for each item—that
is, what sales of soft drinks, coffee, popcorn, hot dogs, and
hamburgers are necessary to cover the portion of the fixed cost
allocated to each of these items;

What the dollar sales for each of these would be at these
break-even points; and

Realistic sales estimates per attendee for attendance of 60,000
and 35,000. (In other words, he wants to know how many dollars each
attendee is spending on food at his projected break-even sales at
present and if attendance grows to 60,000.)

He felt this last piece of information would be helpful to
understand how realistic the assumptions of his model are, and this
information could be compared with similar figures from previous

Discussion Questions

1.Prepare a brief report with the items noted so it is ready for
Dr. Starr at the next meeting.

2.What is your recommendation concerning the ability of the food
service to be self-supporting?

3. Mr. Maddux is concerned whether the food service items are
the correct items. What do you recommend concerning the items for


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