Giuseppe Siragusa Restaurant is a popular spot for families in the San Diego, CA area. On a typical Friday night, the restaurant serves 190 people with an average bill of $54 per person. On a typical night, the cost of unprepared food is $20 per person and the cost of beverages averages $16 per person.

Siragusa has been approached by the UCLA School of Business, who wishes to hold their accounting symposium at the restaurant. Giuseppe Siragusa the owner, as agreed to charge UCLA $70 per person for food, wine and desserts for 175 people. Furthermore, he estimates that the cost of unprepared food for the UCLA function will be $35 per person, with beverages costing $13 per person. In order to accommodate the UCLA group, however, SIRAGUSA will have to close the restaurant for dinner on that night. No additional staff will need to be hired to accommodate the group from UCLA.

REQUIRED

1. Is there an opportunity cost associated with doing the UCLA function? Explain IN WORDS why or why not.

2. What's the "real cost" (as used in this course) of the UCLA function? GIVE THE TOTAL COST, NOT THE PER-UNIT OR PER-MEAL). Hint: What is the Real Cost? The relevant outlay(per person) plus opportunity cost (CM per person).

3. Should SIRAGUSA accept the UCLA business? YES or NO and by how much (in dollars)?

4. List AND explain one qualitative factor that SIRAGUSA should consider before deciding whether or not to accept the UCLA function.