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PART A The total variable costs for a food service operation with a variable cost per meal of $5 and 1,000 projected meal sales would
PART A
The total variable costs for a food service operation with a variable cost per meal of $5 and 1,000 projected meal sales would be?
- $4,000
- $1,000
- $5,000
- $3,000
PART B
The HRM Cafs average lunch sells for $12, while its variable costs per lunch average $8.00. It plans to advertise a Monday lunch special for $11. The special would cost HRM $7.75 per meal (variable costs). An ad in the local paper to promote the special would cost HRM $200. How many lunch covers must be sold to cover the promotion of the average luncheon?
- 62 lunch covers
- 46 lunch covers
- 56 lunch covers
- 50 lunch covers
PART C
Variable costs are those costs which:
- remain the same despite increases or decreases in sales volume.
- related to the fixed assets of the business.
- increase or decrease as sales volume increases or decreases.
- increase or decrease as a range of activity increases or decreases.
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