Question
a. A new restaurant is ready to open for business. It is estimated that the food cost (variable cost) will be 40% of sales, while
a. A new restaurant is ready to open for business. It is estimated that the food cost (variable cost) will be 40% of sales, while fixed cost will be $460,335. The first years sales estimates are $1,250,000. Calculate the firms degree of operating leverage (DOL). Answer to 2 decimal places
b. A new restaurant is ready to open for business. It is estimated that the food cost (variable cost) will be 70.47% of sales, while fixed cost will be $450,000. The first years sales estimates are $611,490. Calculate the firms operating breakeven level of sales. Answer to 2 decimal places
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