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Owner Sue Lan is considering franchising her Noodles by Lan restaurant concept. She believes people will pay $5.00 for a large bowl of noodles. Variable
Owner Sue Lan is considering franchising her Noodles by Lan restaurant concept. She believes people will pay $5.00 for a large bowl of noodles. Variable costs are $2.00 per bowl. Lan estimates monthly fixed costs for a franchise at $10,500. 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 + % Requirement 2. Lan believes most locations could generate $57,500 in monthly sales. Is franchising a good idea for Lan if franchisees want a minimum monthly operating income of $16,500? 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 $16,500. (Abbreviation used: CM = contribution margin.) + = Required sales in dollars + % Is franchising a good idea for Lan if franchisees want a minimum monthly operating income of $16,500? Since the predicted monthly sales of $57,500 are the amount of sales necessary to generate a minimum monthly operating income of $16,500, Lan's franchising concept V a good idea
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