E22-5 Noodles Now fast-food restaurant has been doing such great business that owner May Chen is considering
Question:
E22-5 Noodles Now fast-food restaurant has been doing such great business that owner May Chen is considering franchising her restaurant concept. She believes that customers across the country will happily pay $6 for a large bowl of noodles, veggies, and meat. Variable costs are $2.10 a bowl. Chen estimates that monthly fixed cost for franchisees would be $7.150. Required 1. Use the contribution margin ratio approach to compute a franchisee's breakeven sales in dollars 2. Is franchising a good idea for Chen if franchisees will want a minimum monthly operating income of $7.800. but Chen does not believe most locations could generate more than $25.000 in monthly sales?
Step by Step Answer:
Accounting
ISBN: 9780130906991
5th Edition
Authors: Charles T. Horngren, Walter T. Harrison, Linda S. Bamber, Betsy Willis, Becky Jones