Meg O'Malley's Restaurant has been approached by Melbourne Investments, to hold

a dinner program next month. The manager of the restaurant has agreed to charge $65

per person for food, wine, and dessert for 150 people. The manager estimates that the

cost of the unprepared food will be $30 per person and drinks will be $12 per person.

In order to do this, the restaurant will have to close to the public. The manager would

normally serve 160 people at $50 per person. The cost of the unprepared food is $18

and drinks are $13 per person. No additional waiter employees are needed for the

Melbourne program.

Required:

(a) What is the incremental profit or loss associated with accepting the Melbourne

Investment program?

(b) What is the opportunity cost of accepting the Melbourne Investment program?

(c) What are some qualitative factors that the manager should consider?