Lai believed people would pay $5.50 for a large bowl of noodles. Variable costs would be $2.75 a bowl creating a contribution margin of $2.75 per bowl. Mei Lai estimated monthly fixed costs for franchisees at $8,750. Franchisees wanted a minimum monthly operating income of $3,500 Print Done Lai did franchise her restaurant concept. Because of Happy Noodles' success More Noodles has come on the scene as a competitor. To maintain its market share, Happy Noodles will have to lower its sales price to $5.00 per bowl. At the same time, Happy Noodles hopes to increase each restaurant's volume to 7,500 bowls per month by embarking on a marketing campaign. Each franchise will have to contribute $400 per month to cover the advertising costs. Prior to these changes, most locations were selling 7,000 bowls per month. Print Done Read the requirements Requirement 1. What was the average restaurant's operating income before these changes? Identify the formula labels and compute the operating income before the changes. Contribution margin Less: Operating income Requirement 2. Assuming that the price cut and advertising campaign are successful at increasing volume to t Identify the formula labels and compute the operating income after the cl Contribution margin Less: Contribution margin Less Operating income Requirement 2. As Identify the formula labels and compute the operating income after the changes suming that the price cut and advertising campaign are successful at increasing vol Contribution margin Less Operating income Cutting the sales price and advertising I allow the franchise owners to earn their target profits of S