Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

all the blank boxes with numbers and formulas The owner of Long Island Restaurant is disappointed because the restaurant has been averaging 8,000 pizza sales

all the blank boxes with numbers and formulas image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
The owner of Long Island Restaurant is disappointed because the restaurant has been averaging 8,000 pizza sales per month, but the restaurant and wait staff can make and serve 10,000 pizzas per month. The variable cost (for example, ingredients) of each pizza is \$1.45. Monthly fixed costs (for example, depreciation, property taxes, business license, and manager's salary) are $10,000 per month. The owner wants cost information about different volumes so that some operating decisions can be made. (Click the icon to view the chart for Requirement 1.) Read the requirements. Requirement 1. Use the chart below to provide the owner with the cost information. Then use the completed chart to help you answer the remaining questions. (Enter total variable costs to the nearest dollar. Enter costs per pizza, price per pizza, and profit per pizza to the nearest cent.) tt has been averaging 8,000 pizza sal zas per month. The variable cost (for ple, depreciation, property taxes, wants cost information about differer rmation. Then use the completed ch e nearest dollar. Enter costs per piz Requirement 2. From a cost standpoint, why do companies such as Long Island Restaurant want to operate near or at full capacity? Companies want to run at full capacity to better utilize the resources they spend on costs. The more units they produce, the the cost per unit. Requirement 3 . The owner has been considering waysto increase the sales volume. The owner thinks that 10,000 pizzas could be sold per month by cutting the seiling price per pizza from $6.25 to $5.75. How much extra profit (above the current level) would be generated if the selling price were to be decreased? (Hint: Find the restaurant's current monthly profit and compare it to the restaurant's projected monthly profit at the new sales price and volume.) Identify the profit formula and compute the monthly profit at the current and the new volume. Requirement 3. The owner has been considering ways to increase the sales volume. The owner thinks that 10,000 pizzas could be sold per month by cutting the selling price per pizza from $6.25 to $5.75. How much extra profit (above the current level) would be generated if the selling price were to be decreased? (Hint: Find the restaurant's current monthly profit and compare it to the restaurant's projected monthly profit at the new sales price and volume.) Identify the profit formula and compute the monthly profit at the current and the new volume. Since the restaurant will generate of the sales price to the volume

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

GAO Financial Audit Manual Volume 3 June 2018

Authors: United States Government GAO

2018 Edition

979-8733166001

More Books

Students also viewed these Accounting questions

Question

Perform an Internet search. Discuss a company that uses EPLI.

Answered: 1 week ago

Question

How do you feel about employment-at-will policies? Are they fair?

Answered: 1 week ago