Owner Yinan Song is considering franchising her Noodles for a Song restaurant concept. She believes people will pay $10.00 for a large bowl of noodles. Variable costs are $5.00

per bowl.Song estimates monthly fixed costs for a franchise at $18,000.

Requirements

1.	Use the contribution margin ratio approach to find a franchise's breakeven sales in dollars.
2.	Song believes most locations could generate $74,000 in monthly sales. Is franchising a good idea for Song if franchisees want a minimum monthly operating income of $18,000?