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Background You are the owner of a new food stall in Mega Cafe. Instead of offering variety of food, your strategy is to offer only
Background You are the owner of a new food stall in Mega Cafe. Instead of offering variety of food, your strategy is to offer only two signature dishes that will appeal to customers. You should make other assumptions in addition to the given assumptions below: - Both dishes are made in a single kitchen facility. . All ingredients are purchased from suppliers. You bear the cost of transportation-in. . All kitchen tools and equipment are newly purchased. . You signed a 2-year lease for a stall from Mega Cafe. There is a very heavy penalty for breaking the lease. The monthly rent paid to Mega Cafe includes a fixed payment plus 5% of the monthly sales. Requirements 1. Describe two signature dishes that your food stall has to offer. 2. Identify important manufacturing and non-manufacturing cost items of your business. Your answers should include at least 5 variable costs, 5 fixed costs, and 3 mixed costs. Please also state your assumptions. Present your answer in this format: Cost item Cost behavior Amount per year Amount per with respect to serving (for the number of variable costs and dishes made/sold the variable portion of mixed costs) 3. Determine the cost of each dish based on your answers to Questions 1 and 2. 4. What is your recommended regular selling price of each dish? Explain the reason(s) for your recommendation. 5. Perform CVP analysis
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