Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

e. 9- The owner of a small restaurant that sells burgers pays each month $1,000 in rent, $300 in utilities, $200 interest on his loan,

image text in transcribed
e. 9- The owner of a small restaurant that sells burgers pays each month $1,000 in rent, $300 in utilities, $200 interest on his loan, and $500 on advertising on local buses. A burger sandwich is priced at $4.00. Unit variable costs for the burger sandwich is $2.00. a. Calculate unit margin and monthly fixed cost. b. How many sandwiches does the restaurant need to sell to break-even each month? C. Calculate Total Cost at Break even d. Calculate Total Revenue at Break even. How many sandwiches does the restaurant need to sell to earn $500 profit each month? f. Suppose restaurant sells 1200 burgers each month. Calculate profit. 8. Suppose restaurant sells 1200 burgers each month. Owner is thinking whether to advertise also in local TV to increase demand. Local TV ads costs $500 monthly. How many more burgers should restaurant sell in order to at least offset local TV advertising costs? h. Suppose restaurant sells 1200 burgers at $4 each. Owner is thinking whether to increase the price to $4.5. But he knows that the price increase will droby the demand to 1100 burgers. Should he increase the price or not

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

Activity Based Cost Management In Government

Authors: Gary Cokins

2nd Edition

1567261817, 978-1567261813

More Books

Students also viewed these Accounting questions

Question

Base pay on the value of jobs and performance.

Answered: 1 week ago

Question

Was it ethical to deny treatment to the control group?

Answered: 1 week ago