E3-26. Customer-Level Planning

7-Eleven operates a number of convenience stores worldwide. Assume that an analysis of operating costs, customer sales, and customer patronage reveals the following:

Fixed costs per store ............................................... $80,000.00/year

Variable cost ratio .................................................. 0.80

Average sale per customer visit ....................................... $17.00

Average customer visits per week ..................................... 1.50

Customers as portion of city population ................................ 0.05

Required

Determine the city population required for a single 7-Eleven to earn an annual profit of $40,000.