Company A can order meals for its employees from a catering company or prepare meals on-site. Use the information in the exhibit to complete the following items.

Dear Kim,

We are considering hiring a catering company. Currently, we are preparing meals for employees. The following is the cost of preparing a meal:

Food	$3.00
Labor	2.00
Fixed overhead	1.00
Total	$6.00

The caterer has quoted a price of $5.50 per meal. Please help us to determine whether we should buy meals from this catering company.

Best,

Taylor

Which option is less expensive?

Assume in addition that the rent of a kitchen for preparing meals is $200 per day, one meal is served to each employee per day, and the company has 100 employees. What is the maximum price the company should pay for a catered meal?