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Pete approached your friend and affered to lease the space of coffee shop for $9,600 a year. Your friend asked your apinion on whether she
Pete approached your friend and affered to lease the space of coffee shop for $9,600 a year. Your friend asked your apinion on whether she should lease the coffee shop space. You conducted an analysis and came up with the following estimates for leasing out the coffee shop space. Total indirect cost would go down to $45,000. Dining raom's revenue and direct casts would not be affected. Lounge's revenue would reduce by $12,000 and direct costs would reduce by $9,000. Q1. What would be the revenue and direct costs of the Lounge if lea: Q2. What would be the nev total indirect cost if leasing out the coffee shop? Allocate that new total indiret cost to each units based on the square footage. Use cell reference to Q3. Incorporate all new information to update the table below for the case that the coffee shop space is leased. Should the owner lease the coffee shop space? [Compare the "after" total operating income to the "before" total operating
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