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The owner of New Jersey Restaurant is disappointed because the restaurant has been averaging 8,000 pizza sales per month, but the restaurant and wait staff
The owner of New Jersey Restaurant is disappointed because the restaurant has been averaging 8,000 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 $1.45. Monthly fixed costs (for example, depreciation, property taxes, business license, and manager's salary) are $10,000 per month. The owner wants cost information about different volumes so that some operati decisions can be made. (Click the icon to view the chart for Requirement 1.1 Read the requirements On pacara Data Table Monthly pizza volume. 8,000 10,000 Requirements Total fixed costs Monthly pizza volume ....... 5,000 $ Total fixed costs... Total variable costs Total costs $ Fixed cost per pizza .. Total variable costs Total costs. $ $ Fixed cost per pizza........ $ Variable cost per pizza.... Average cost per pizza Selling price per plzza....... S 6.25 $ 6.25 $ 6.25 Average profit per pizza 1. Use the chart below to provide the owner with the cost information. Then use the completed chart to help you answer the remaining questions 2. From a cost standpoint, why do companies such as New Jersey Restaurant want to operate near or at full capacity? 3. The owner has been considering ways to increase the sales volume. The owner thinks that 10,000 pizzas could be sold per month by cutting the selling price per pizza from $6.25 to $5.75. How much extra profit (above the current level) would be generated if the selling price were to be decreased? (Hint: Find the restaurant's current monthly profit and compare it to the restaurant's projected monthly profit at the new sales price and volume) Variable cost per pizza IEEE Average cost per pizza Selling price per pizza... Average profit per pizza Print Done Print Done Enter any number in the edit fields
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