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The owner of Brooklyn Restaurant is disappointed because the restaurant has been averaging 5,000 pizza sales per month but the restaurant and wait staff can
The owner of Brooklyn Restaurant is disappointed because the restaurant has been averaging 5,000 pizza sales per month but the restaurant and wait staff can make and serve 10,000 pizzas per month. The variable cost (for example, ingredients) of each pizza is $1.20. Monthly fixed costs (for example, depreciation, property taxes, business license, manager's salary) are $5,000 per month. The owner wants cost information about different volumes so that he can make some operating decisions. Monthly pizza volume 2,500 5,000 10,000 Total fixed costs Total variable costs Total costs Fixed cost per pizza Variable cost per pizza Average cost per pizza Sales price per pizza $5.50 $5.50 $5.50 Average profit per pizza
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