Help with Requirment $2$ Before franchising her Noodle Time restaurant concept, owner Yang Wong had made the following assumptions.

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Requirements

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What was the average restaurant's operating income before these changes?

Assuming that the price cut and advertising campaign are successful at

increasing volume to the projected level, will the franchisees still earn their target

Requirement $1.$ What was the average restaurant's operating income before these changes?

profit of $$7,000$ per month? Show your calculations.

Identify the formula labels and compute the operating income before the changes.

More info

Wong believed people would pay $$6\mathrm{.}50$ for a large bowl of noodles. Variable costs

would be $$1\mathrm{.}95$ a bowl creating a contribution margin of $$4\mathrm{.}55$ per bowl.

Yang Wong estimated monthly fixed costs for franchisees at $$8,400.$ Franchisees

wanted a minimum monthly operating income of $$7,000$

Requirement $2.$ Assuming that the price cut and advertising campaign are successful at increasing volume to the projected level, will the franchisees

Identify the formula labels and compute the operating income after the changes.

More info

Wong did franchise her restaurant concept. Because of Noodle Time's success,

Noodles $\text{'}n$ More has come on the scene as a competitor. To maintain its

market share, Noodle Time will have to lower its sales price to $$6\mathrm{.}00$ per bowl. At

the same time, Noodle Time hopes to increase each restaurant's volume to $6,000$

bowls per month by embarking on a marketing campaign. Each franchise will have

to contribute $$500$ per month to cover the advertising costs. Prior to

these changes, most locations were selling $5,500$ bowls per month.