1) Owner Sue Lan is considering franchising her Noodles restaurant concept. She believes people will pay $150.00 for a large bowl of noodles. Variable costs are $60 per bowl. Lan estimates monthly fixed costs for a franchise at $126,000.

1. Use the contribution margin ratio approach to find a franchise's breakeven sales in dollars. (round your answer to 2 decimal places)

2. Lan believes most locations could generate $362500 in monthly sales. Is franchising a good idea for Lan if franchisees want a minimum monthly operating income of $90,000?

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2) Griffin's Steel parts produces parts for the automobile industry. The company has monthly fixed costs of $660,000 and a contribution margin of 75% of revenues.

1. Compute Griffin's monthly breakeven sales in dollars. Use the contribution margin ratio approach. round your answer to the nearest dollar

2. Use contribution margin income statements to compute Griffin's monthly operating income or operating loss if revenues are $510,000 and if they are $1,010,000.

3. do the results in part 2 make sense given the breakeven sales you computed in part 1? explain

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3) Highway driving school charges $560 per student to prepare and administer written and driving tests. Variable costs of $280 per student include trainers' wages, study materials, and gasoline. Annual fixed costs of $92400 include the training facility and the fleet of cars.

1. For each of the following independent situations, calculate the contribution margin per unit and the breakeven point in units by first referring to the original data provided:

a. Breakeven point with no change in information

b. decrease sales price to $400 per student

c. decrease variable costs to $224 per student

d. decrease fixed costs to $81200

2. Compare the impact of changes in the sales price, variable costs, and fixed costs on the contribution margin per unit and the breakeven point in units.

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4) Ronnie's Repair Shop has a monthly target operating income of $31,000. Variable costs are 20% of sales, and monthly fixed costs are $19,000.

1. Compute the monthly margin of safety in dollars if the shop achieves its income goal.

2. Express Ronnie's margin of safety as a percentage of target sales.