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Solve for part B please Carla Vista Communications operates a customer call center that handles billing inquiries for several large insurance firms. Since the center

Solve for part B please

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Carla Vista Communications operates a customer call center that handles billing inquiries for several large insurance firms. Since the center is located on the outskirts of town, where there are no restaurants within a 20-minute drive, the company has always operated an on-site cafeteria for employees. The cafeteria uses $198,000 in food products each year and serves 6,000 meals per month, at a price of $5 each. It employs five workers whose salaries and benefits total $130,000 per year. Depreciation on the cafeteria equipment is $17,000 per year. Other fixed overhead that is directly related to operating the cafeteria totals $15,000 per year. Sandhill Foods has offered to take over Carla Vista's cafeteria operations. As part of the transition, current cafeteria employees would become Sandhill employees, and Sandhill would assume all out-of-pocket costs to operate the cafeteria. Sandhill would continue to offer meals at $5 each and would pay Carla Vista $1 per meal for the use of its cafeteria facilities. (a) Your answer is correct. Calculate the net revenue from cafeteria operations and revenue from outsourcing the cafeteria to Sandhill Foods. Net revenue from operating the cafeteria $ 17000 Revenue from outsourcing the cafeteria 72000 Should Carla Vista continue to operate the employee cafeteria, or should the company accept Sandhill's offer? Carla Vista should accept v Sandhill's offer. (b) Your answer is partially correct. Assume that Carla Vista accepted Sandhill's offer two years ago and that all costs have remained constant. Since then, a new shopping mall has opened close to the company's location, bringing in several fast-food and quick-service restaurants. Employee demand for cafeteria service has dropped to 2,500 meals per month, and Sandhill has laid off two of the five cafeteria workers. Calculate net revenue from operating the cafeteria and the revenue from outsourcing the cafeteria. $ Net revenue from operating the cafeteria $ 30000 Revenue from outsourcing the cafeteria To offset the lower demand for meals, Best Ever is proposing to increase the price per meal from $5 to $6 per meal. Does it make financial sense for Carla Vista to renew Sandhill's contract for another year, or should it resume operation of the cafeteria operation and charge the proposed $6 per meal price? The company shoud not resume the operation of the cafeteria

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