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19 Denny's, just off the San Bernardino Freeway in Pomona, California, specializes in a Super Slam breakfast selling for $7. Assume daily fixed costs are
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Denny's, just off the San Bernardino Freeway in Pomona, California, specializes in a Super Slam breakfast selling for $7. Assume daily fixed costs are $1,575, and variable costs are $5 per meal. With a capacity of 750 meals per day, the restaurant serves an average of 700 meals each day. REQUIRED a. Determine the current average cost per meal. b. A busload of 30 Girl Scouts stops on its way home from the San Bernardino National Forest. The leader offers to bring them in if the scouts can all be served a meal for a total of $195. The owner refuses, saying he would lose $0.75 per meal if he accepted this offer. How do you think the owner arrived at the $0.75 figure? Comment on the owner's reasoning. c. A local businessman on a break overhears the conversation with the leader and offers the owner a one-year contract to feed 100 of the businessman's employees one meal each day at a special price of $5.50 per meal. Should the restaurant owner accept this offer? Why or why notStep by Step Solution
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