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Owner Shan Lo is considering franchising her Noodles Galore restaurant concept. She believes people will pay $5.00 for a large bowl of noodles. Variable costs
Owner Shan Lo is considering franchising her Noodles Galore restaurant concept. She believes people will pay $5.00 for a large bowl of noodles. Variable costs are $2.00 a bowl. Lo estimates monthly fixed costs for franchisees at $8,400. Requirements 1. 2. Use the contribution margin ratio shortcut approach to find a franchisee's break-even sales in dollars. Is franchising a good idea for Lo if franchisees want a minimum monthly operating income of $6,000 and Lo believes most locations could generate $25,000 in monthly sales? Requirement 1. Use the contribution margin ratio shortcut approach to find a franchisee's break-even sales in dollars. Begin by identifying the formula to compute the sales in units at various levels of operating income using the contribution margin approach. + = Break-even sales in dollars (Round your answer up to the nearest whole dollar.) The break-even sales in dollars is $ Requirement 2. Is franchising a good idea for Lo if franchisees want a minimum monthly operating income of $6,000 and Lo believes most locations could generate $25,000 in monthly sales? The target sales in dollars to reach the minimum monthly operating income for franchisees is $ Shan Lo's franchising concept idea. She expects most locations the sales required to earn the target profit
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