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Owner Shirl Low is considering franchising her Noodles by Low restaurant concept. She believes people will pay $6.00 for a large bowl of noodles.
Owner Shirl Low is considering franchising her Noodles by Low restaurant concept. She believes people will pay $6.00 for a large bowl of noodles. Variable costs are $1.50 per bowl. Low estimates monthly fixed costs for a franchise at $13,500. 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 "0" for any zero balances. Abbreviation used: CM contribution margin.) % = Required sales in dollars = Libr Requirement 2. Low believes most locations could generate $70,000 in monthly sales. Is franchising a good idea for Low if franchisees want a minimum monthly operating income of $30,000? Explain your answer. Dure 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 $30,000. (Abbreviation used CM contribution margin.) dy( tion + Required sales in dollars % = Is franchising a good idea for Low if franchisees want a minimum monthly operating income of $30,000? Explain your answer JUT UE UE Since the predicted monthly sales of $70,000 are the amount of sales necessary to generate a minimum monthly operating income of $30,000, Low's franchising concept a good idea. JUE A
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