Lauren Stephens owns William's Restaurant, which sells hamburgers for carry out or drive through only. Each hamburger sells for \(\$ 2\). Lauren employs several part-time employees and a full-time manager. She leases the building and hires a cleaning company to provide services on a weekly basis. The manager, who is paid a monthly salary, carries out all administrative functions such as hiring, scheduling, and counting cash.

The following expenses were incurred in November.

The restaurant sold 10,000 hamburgers during the month, and there is no WIP inventory at the end of the month.
\section*{Required}
A. Identify each expense as fixed or variable.
B. Classify each cost as one of the following: direct materials cost, direct labor cost, overhead cost, or period expense.
C. Prepare an income statement for November.
D. Compute gross margin as a percentage of sales.
E. Compute net income as a percentage of sales. What are the implications of your findings in terms of risk? Elaborate.

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Ground meat $1,500 Manager's salary $2.100 Lettuce 350 Utilities 600 Tomatoes 400 Depreciation, grill 350 Buns 400 Depreciation, signs 100 Condiments 70 Advertising 75 Part-time labor, cooks 2.500 Rent 800 Part-time labor, servers 2.250 Cleaning service 300 Wrapping paper and bags 30