Links Fine Burgers Inc. (Links), is a new company currently studying various alternatives in regard to opening burger outlets. The only available data was formulated by a hired consultant who, unfortunately, left the country suddenly. A summary of the information that the consultant developed is as follows:

Average Selling Price per Burger $7.50

Normal Monthly Costs	Fixed	Variable
Cost of Burgers Sold	$0	$5,500
Managers Salary	2,000	0
Wages	2,000	0
Rent	1,500	500
Utilities	500	200
Insurance and Commissions	1,000	0
Total Costs	$7,000	$6,200

*Note: Costs are based on budgeted sales of 2,000 burgers per month.

The above information represents estimates for the operations of a burger outlet. Links is interested in opening the outlets as soon as possible and has asked you to comment on the various scenarios as reflected in the questions a thru to c below.

Required: a) Compute the breakeven point for a burger outlet in terms of both sales dollars and number of burgers sold each month. (6 marks)

b) The company is considering offering a promotional selling price of $5.00 per burger during the first month of operations. How many extra burgers will have to be sold by a burger outlet at the promotional price compared to the normal average selling price in order to earn operating income of $2,500 during the first month? (6 marks)

c) As an incentive program for the outlet manager, Links is considering implementing an alternative compensation method. Instead of paying the manager a fixed salary of $2,000 per month, the company is considering an incentive plan of $1,000 per month plus 8% of monthly revenue Using this alternative method and the normal average selling price per burger, calculate how many burgers will have to be sold to achieve an operating income of $2,000 per month.