A. Calculate the breakeven number of additional customers for each added hour of operation up to 4 am.

B. Calculate the breakeven number of additional customers for an entire year, assuming (i) closing time of 4 am and then (ii) your recommended closing time if it differs from 4 am.

C. Find the safety margin on new customers for the year.

[Hint: For the per-year analysis, remember to account for the cost of the security upgrade. Use straight-line depreciation as a measure of the fixed cost of the security upgrade, and then add the cost of overtime labor for the additional hours of business for each of the 360 business days in the year.]

Contribution margin is = 11.00

Cost of security system is = $21,000/

7 year shelf life $3000 depreciation/ per year hour new customers MR MC added profit added profit per year

10-11pm, 10, 110, $30, 80, 28,800

11-12pm, 8, 88, $30, 58, 20,880

12-1am, 6, 66, $45, 21, 7,560

1-2am, 5, 55, $45, 10, 3,600

2-3am, 5, 55, $45, 10, 3,600

3-4am, 5, 55, $45, 10, 3,600