Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 2 Not yet answered Marked out of 18.75 Flag question Special Order Nature's Garden, a new restaurant situated on a busy highway in Pomona,

image text in transcribed
Question 2 Not yet answered Marked out of 18.75 Flag question Special Order Nature's Garden, a new restaurant situated on a busy highway in Pomona, California, specializes in a chef's salad selling for $7. Daily fixed costs are $1,100, and variable costs are $4 per meal. With a capacity of 550 meals per day, the restaurant serves an 500 meals each day. (a.) Determine the current average cost per meal. Round your answer to two decimal places. $ (b.) A busload of 30 Girl Scouts stops on its way home from the San Bernardino National Forest. The leader offers to bring them in if the scouts can all be served a meal for a total of $159. The owner refuses, saying he would lose $0.90 per meal if he accept offer. How do you think the owner arrived at the $0.90 figure? Current average cost per meal Per meal revenue from Girl Scouts Loss per meal S (c.) A local businessman on a break overhears the conversation with the leader and offers the owners a one-year contract to feed 300 of the businessman's employees one meal each day at a special price of $5.10 per meal. Compute the net advantage (disadvantage) of accepting the contract. Only use a negative sign with your answer to indicate a net disadvantage. Otherwise, do not use negative signs with answers. Daily contribution from special order $ Daily opportunity cost Net advantage (disadvantage) Based on your above results, should the restaurant owner accept this offer? The restaurant owner should accept the offer. OThe restuarant owner should not accept the offer

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

College Accounting A Contemporary Approach

Authors: David Haddock, John Price, Michael Farina

5th Edition

126078035X, 978-1260780352

More Books

Students also viewed these Accounting questions