Question
A restaurant sells fast food for $10 per order. The daily fixed cost of the business is $5,000. The variable cost per meal is equal
A restaurant sells fast food for $10 per order. The daily fixed cost of the business is $5,000. The variable cost per meal is equal to $3.15. The delivery volume is equal to 1250. The average daily delivery volume is 1125. Because the restaurant is popular, customers typically have to wait 10 to 15 minutes to be seated.
Questions. 1 What is the average cost per meal for this restaurant? Answer rounded to the nearest percent 2 Is the restaurant business generating enough sales to break even? The calculation should be to the nearest dollar. 3 If you answered yes to question 2, by what percent would the restaurant's profit increase if the number of meals delivered increased by 5%? If your answer to question 2 is no, ignore this question and continue with question 4. 4 If you answered no to the second question item, what is the unit contribution margin the restaurant must have to break even at the current delivery level? Round your answer to the nearest cent. 5 A nearby company operator has offered this restaurant a one-year contract to serve 200 employees at $5 per meal. Does the restaurant have the ability to meet the terms of the contract? Answer "yes" or "no" and show the calculation to explain why
6 Suppose a tour group of 30 people is passing through the area. The tour leader offers to get the restaurant to accept the offer of $195 for a meal for all 30 people. Should the restaurant accept or reject the offer? Answer accept or decline and show your work to the nearest dollar.
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