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Owner Shirl Le is considering franchising her Noodles by Le restaurant concept. She believes people will pay $8.00 for a large bowl of noodles. Variable
Owner Shirl Le is considering franchising her Noodles by Le restaurant concept. She believes people will pay $8.00 for a large bowl of noodles. Variable costs are $1.50 per bowl. Le estimates monthly fixed costs for a franchise at $18,000. Read the requirements Requirement 1. Use the contribution margin ratio approach to find a franchise's breakeven sales in dollars. Begin by showing the formula and then entering the amounts to calculate the breakeven point in sales dollars using the contribution margin approach. (Enter a "' for any zero balances. Abbreviation used: CM = contribution margin.) ) Required sales in dollars = Requirement 2. Le believes most locations could generate $79,500 in monthly sales. Is franchising a good idea for Le if franchisees want a minimum monthly operating income of $33,000? Explain your answer. Begin by showing the formula and then entering the amounts to calculate the targeted sales dollars required to earn the minimum monthly operating income of $33,000. (Abbreviation used: CM = contribution margin.) = Required sales in dollars Is franchising a good idea for Le if franchisees want a minimum monthly operating income of $33,000? Explain your answer. Since the predicted monthly sales of $79,500 are the amount of sales necessary to generate a minimum monthly operating income of $33,000, Le's franchising concept a good idea i Requirements 1. Use the contribution margin ratio approach to find a franchise's breakeven sales in dollars. 2. Le believes most locations could generate $79,500 in monthly sales. Is franchising a good idea for Le if franchisees want a minimum monthly operating income of $33,000? Explain your answer. Print Done
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