The

Wholesome

Buffet offers an all-you-can-eat buffet meal for

$29

per person. The restaurant employs ten salaried employees. Rent for the building, employee salaries, and other fixed costs for the restaurant are

$105,600

per month when the restaurant serves meals up to

14,300

guests in that month. If the restaurant were to serve more than

14,300

guests in any given month, it would need to hire two additional servers and two additional kitchen staff for an additional fixed cost of

$18,000

per month. The variable cost of food is

$17

per guest.Read the requirements

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.Requirement 1. What is the restaurant's cost equation for estimating costs if the number of guests to be served is up to

14,300

guests per month?

y =

x +

Requirement 2a. If the restaurant were to serve

13,200

guests in

May,

what would be the estimated total cost (Use the cost equation from Requirement 1.)

If the restaurant were to serve 13,200 guests in May, the estimated total cost would be

.

Requirement 2b. If the restaurant were to serve

13,200

guests in

May,

what would be the average cost per guest?

If the restaurant were to serve 13,200 guests in May, the average cost per guest would be

.

Requirement 3a. If the restaurant were to serve

11,700

guests in

June,

what would be the estimated total cost using the cost equation from Requirement 1?

If the restaurant were to serve 11,700 guests in June, the estimated total cost using the cost equation from Requirement 1
would be		.

Requirement 3b. If the restaurant were to serve

11,700

guests in

June,

what would be the estimated total cost using the average per guest cost from Requirement 2b?

If the restaurant were to serve 11,700 guests in June, the estimated total cost using the average cost per guest from
Requirement 2b would be		.

Requirement 3c. Why is there a difference in the two cost estimates?

There is a difference in the two cost estimates because the average cost per guest

changes

remains constant

as volume changes, due to the

fixed component

variable component

of the buffet's costs. The fixed cost per unit

decreases

increases

remains constant

as volume decreases, while the variable cost per unit

decreases.

increases.

remains constant.

Requirement 4. What is the restaurant's cost equation for estimating costs if the number of guests to be served is more than

14,300

guests per month?

y =

x +

Requirement 5. If the restaurant were to serve

15,700

guests in

July,

what would be the estimated total cost? (Use the cost equation from Requirement 4.)

If the restaurant were to serve 15,700 guests in July, the estimated total cost using the cost equation from Requirement 4
would be		.