Before franchising her Happy Noodles restaurant concept, owner Lei Wong had made the following assumptions. View the assumptions, Read the requirements. View more information. Requirement 1. What was the average restaurant's operating income before these changes? Identify the formula labels and compute the operating income before the changes. Times: Contribution margin Less: Operating income More information Wong did franchise her restaurant concept. Because of Happy Noodles's success, Value Noodles has come on the scene as a competitor. To maintain its - market share, Happy Noodles will have to lower its sales price to $4.75 per bowl. At the same time, Happy Noodles hopes to increase each restaurant's volume to 8,000 bowls per month by embarking on a marketing campaign. Each franchise will have to contribute $400 per month to cover the advertising costs. Prior to these changes, most locations were selling 7,500 bowls per month. Assumptions Wong believed people would pay $5.25 for a large bowl of noodles. Variable costs would be $2.10 a bowl creating a contribution margin of $3.15 per bowl. Lei Wong estimated monthly fixed costs for franchisees at $7,500. Franchisees wanted a minimum monthly operating income of $7,050. Print Done - Clear all Check answer