Question
Regal Stars Company owns and operates a nationwide chain of movie theaters.The chain's 100 properties vary from low-volume, small-town, single-screen theaters to high-volume, urban, multiscreen
Regal Stars Company owns and operates a nationwide chain of movie theaters.The chain's 100 properties vary from low-volume, small-town, single-screen theaters to high-volume, urban, multiscreen theaters.The firm's management is considering installing popcorn machines, which would allow the theaters to sell freshly popped corn rather than prepopped corn.The fresh popcorn will be sold for P35.00 tub.The annual rental costs and the operating costs vary with the size of the popcorn machines.The machine capacities and costs are shown below.
Standard
Super
Giant
Annual capacity40,000 tubs
80,000 tubs
120,000 tubs
Costs:Annual rentalP160,000
P220,000
P400,000
Popcorn cost per tub2.60
2.60
2.60
Other cost per tub24.40
22.80
21.00
Cost of each tub1.60
1.60
1.60
At what volume in number of tubs would the Standard Popper and the Super Popper earn the same profit or loss in each movie theater?
Group of answer choices
37,500 tubs
100,000 tubs
Cannot be determined
70,588 tubs
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