Question
Tiao Frozen Meat Store intends to open a branch in Sheung Wan, specializing in selling a lunch box, priced at $50, with an average variable
Tiao Frozen Meat Store intends to open a branch in Sheung Wan, specializing in selling a lunch box, priced at $50, with an average variable cost of $25, and the stores monthly rent $40,000. The stores target operating profit is $120,000 per month. Claim: 1. Calculate how many lunch boxes the store needs to sell each month to achieve the target operating profit.
2. Assuming that the actual monthly sales volume after opening the store is 8,000 copies, there are four independent plans in Dipiao Frozen Meat Store as follows:
a. Sell lunch boxes at 10% off, plus free drinks, the cost of each can of drinks is $3;
b. The advertising fee is $80,000 on TV. It is estimated that the sales of lunch boxes after the advertising is broadcast can increase by 20%;
c. Relocate the store to North Point and reduce the monthly rent to $30,000. However, due to the relatively small number of people, the sales of lunch boxes are expected to decrease by 40%;
d. The lunch box is repackaged and sold in lightweight packages. The selling price and variable cost of the new lunch box are $37 and $21, respectively.
Calculate the operating profit of each plan and state which plan you would recommend to Tiaotiao Frozen Meat Store.
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