Question 5:

You run a school in Florida. Fixed monthly cost is $5,041.00 for rent and utilities, $6,181.00 is spent in salaries and $1,561.00 in insurance. Also every student adds up to $92.00 per month in stationary, food etc. You charge $692.00 per month from every student now.

You are considering moving the school to another neighborhood where the rent and utilities will increase to $10,886.00, salaries to $6,885.00 and insurance to $2,162.00 per month. Variable cost per student will increase up to $167.00 per month. However you can charge $1,061.00 per student. At what point will you be indifferent between your current mode of operation and the new option?

Question 8:

You run a nail salon. Fixed monthly cost is $5,325.00 for rent and utilities, $6,233.00 is spent in salaries and $1,559.00 in insurance. Also every customer requires approximately $5.00 in supplies. You charge $62.00 on average for each service.

You are considering moving the salon to an upscale neighborhood where the rent and utilities will increase to $10,789.00, salaries to $6,154.00 and insurance to $2,413.00 per month. Cost of supplies will increase to $7.00 per service. However you can now charge $143.00 per service. At what point will you be indifferent between your current location and the new loaction?

Question 9:

A Restaurant is open only for 25 days in a month.

Expenses for the restaurant include raw material for each sandwich at $6.00 per slice, $1,219.00 as monthly rental and $420.00 monthly as insurance. They consider the cost of lost sales as $4.00 per item. They are able to sell any leftover sandwiches for $3. They prepares 200.00 sandwiches and sells them at a rate of $14.00/sandwich. Today there was a party at nearby office so the demand for sandwiches rose to 224.00. How much profit did the restaurant earn today?