Oh, hello, Maggi. You say Mr. Pappas is making more selling hot dogs and soft drinks than he should? Are his chili cheese hot dogs still two dollars?
I see. Well, I know Mr. Papppas pays $14,400 a year to rent that building on Main Street, and his utilities are at least $800 a month. That is at least $2,000 a month, a thousand hot dogs a month, just to keep a roof overhead. And property taxes will add a couple of hundred a month to that. So that puts up to $2,200 a month.
Now, you make what? Seven fifty an hour? By the time Mr. Pappas pays FICA taxes, workmans comp in case someone is injured, and unemployment taxes, you cost him almost $9.00 an hour. So how many hours do you work each week?
Six five hour shits a week? That is thirty hours a week. Well, to be conservative, lets say you cost Mr. Pappas $8.75 times 30, or $262.50 a week. How many people does Mr. Pappas employ?
Seven? That puts his payroll at almost $1850 dollars a week. And he has to pay himself as well. So far we are up to $2,350 a week, before he earns a dime.
How much do you suppose Mr. Pappas hot dogs cost him. Eighty cents for the wiener and bun? How about the chili and cheese?
Well, I don’t see how he gets by with less than twenty cents a dog for chili, cheese, onions, and the other condiments. So Mr. Pappas hot dogs cost him a dollar ten and sell for two dollars. How many hot dogs would he have to sell to break even?
At 90 cents each, a little more than 2600 dogs will put him at the point he can begin to pay himself. If he is going to make $24,000 a year, he will have to sell about 3500 hot dogs a week. How many does he reverie each week?
36 packs of 100 wieners a week? And buns the same? Then he must be selling about 3,600 hot dogs a week. More and he would run out, less and he would be up to his keister in hot dogs.
He does make a fair profit on the soft drinks, but even that is not as much as you would think. I would guess MR. Pappas makes around $40,000 a year, for working at least sixteen hours a day, 358 days a year.
Still think he’s getting rich, Maggi? No? I did not think you had thought it through, but think of something else. If the plant Mr. Pappas depends on for much of his trade were to close he would lose money almost instantly.
Every day he opens his doors, Mr. Pappas is in a high stakes poker game, with his family’s income as the stakes. What he makes is far less than the amount of labor he puts in is worth.
Yet Mr. Pappas takes that risk because he enjoys working young people like yourself, and chatting with his friends at the mill. The hot dog business is the only trade he knows, so he cannot change.
And speaking of change, when are you taking your CPA test? Serving hot dogs will do for a trade, but everyone needs at least one profession as well.