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Eat N Eat shop operates sandwiches on the go in shopping malls. The average selling price of a sandwich is P100. The average cost
Eat N Eat shop operates sandwiches on the go in shopping malls. The average selling price of a sandwich is P100. The average cost of each sandwich is P60. A new mall is opening where the company wants to locate a shop but the location manager is not sure about the rent method to accept. The mall operator offers two options for shop rentals as follows: [1] paying a base rent of P40,000 plus 8% of revenue received, or [2] paying a base rent of P20,000 plus 20% of revenue received up to a maximum of P80,000. Eat N Eat will be indifferent between options 1 and 2 when its level of sales is: P1,000,000 P750,000 P900,000 P3,333,333
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