Answered step by step
Verified Expert Solution
Link Copied!
Question
1 Approved Answer

Special Order Denny's, just off the San Bernardino Freeway in Pomona, California, specializes in a Super Slam breakfast selling for $7. Assume daily fixed costs

image text in transcribed

Special Order Denny's, just off the San Bernardino Freeway in Pomona, California, specializes in a Super Slam breakfast selling for $7. Assume daily fixed costs are $1,575, and variable costs are $5 per meal. With a capacity of 750 meals per day, the restaurant serves an average of 700 meals each day. (a.) Determine the current average cost per meal. Round your answer to two decimal places. $ 7.25 (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 $195. The owner refuses, saying he would lose $0.75 per meal if he accepted this offer, How do you think the owner arrived at the $0.75 figure? Current average cost per meal S 0 Per meal revenue from Girl Scouts 0 Loss per meal 0 (c.) A local businessman on a break overhears the conversation with the leader and offers the owners a one-year contract to feed 100 of the businessman's employees one meal each day at a special price of $5.50 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 0 Net advantage (disadvantage) 0 Based on your above results, should the restaurant owner accept this offer? The restaurant owner should accept the offer. The restaurant owner should not accept the offer. Please answer all parts of the

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_2

Step: 3

blur-text-image_3

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

Cost Accounting Foundations And Evolutions

Authors: Michael R. Kinney, Jenice Prather-Kinsey, Cecily A. Raiborn

6th Edition

0324235011, 978-0324235012

More Books

Students explore these related Accounting questions

Question

Was ignoring the problem an option? Why?

Answered: 3 weeks ago