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Owner Sung Chi is considering franchising her Global Chopsticks restaurant concept. She believes people will pay $5.75 for a large bowl of noodles. Variable costs
Owner Sung Chi is considering franchising her Global Chopsticks restaurant concept. She believes people will pay $5.75 for a large bowl of noodles. Variable costs are $2.30 a bowl. Chi estimates monthly fixed costs for franchisees at $9,000. Read the requirements. Requirement 1. Find a franchisee's breakeven 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. Breakeven sales in dollars The breakeven sales in dollars is CITES Requirement 2. Is franchising a good idea for Chi if franchisees want a minimum monthly operating income of $5,700 and Chi believes that most locations could generate $25,000 in monthly sales? The target sales in dollars to reach the minimum monthly operating income for franchises is Sung Chi's franchising concept Videa. She expects most locations the sales required to earn the target profit.
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