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Owner Yinan Song is considering franchising her Noodles by Song restaurant concept. She believes people will pay $5.00 for a large bowl of noodles. Variable
Owner Yinan Song is considering franchising her Noodles by Song restaurant concept. She believes people will pay $5.00 for a large bowl of noodles. Variable costs are $2.00 per bowl. Song estimates monthly fixed costs for a franchise at $16,500. 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. Song believes most locations could generate $95,000 in monthly sales. Is franchising a good idea for Song if franchisees want a minimum monthly operating income of $33,000? 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 Song if franchisees want a minimum monthly operating income of $33,000? Since the predicted monthly sales of $95,000 are the amount of sales necessary to generate a minimum monthly operating income of $33,000, Song's franchising concept a good idea. Requirements 1. 2. Use the contribution margin ratio approach to find a franchise's breakeven sales in dollars. Song believes most locations could generate $95,000 in monthly sales. Is franchising a good idea for Song if franchisees want a minimum monthly onerating income of $33.0002
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