the Eastpointe Cafs average lunch sells for $12, while its variable costs per lunch average $8.00. It plans to advertise a Monday lunch special for $11. The special would cost Eastpointe $7.75 per meal (variable costs). An ad in the local paper to promote the special would cost Eastpointe $200.

Required:

1.What are the cafs contribution margin (CM) and contribution margin ratio (CMR) to begin with?

2.What are the CM and CMR based strictly on the lunch specialrelated price and cost?

3.How many lunch covers must be sold to cover the promotion of the luncheon special?