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Help Carreras Caf is a Spanish restaurant in a college town. The owner expects that the number of meals served in June will be
Help Carreras Caf is a Spanish restaurant in a college town. The owner expects that the number of meals served in June will be 50 percent below those served in May, because so many students leave for the summer. In May, the restaurant served 4,300 meals at an average price of $20. In the summer (June through August), the average price of a meal typically increases by 35 percent and the average food cost of a meal increases by 20 percent. Other costs are typically unchanged during the summer. The following cost information is available for May. Service costs (variable with respect to meals) Variable service costs (with respect to meals) Food costs Labor Other variable costs $10,800 16,500 6,200 Fixed service costs. 8,700 Total service costs $42,200 Marketing and administrative costs. Marketing (variable with respect to meals) 5,900 Administrative (fixed)) 4,400 Total marketing and administrative costs $10,300 Total costs $52,500
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