Woo believed people would pay $5.75 for a large bowl of noodles. Variable costs would be $2.30 a bowl creating a contribution margin of $3.45 per bowl. Jackie Lo Woo estimated monthly fixed costs for franchisees at $9,000. Franchisees wanted a minimum monthly operating income of $5,700. 1. What was the average restaurant's operating income before these changes? 2. Assuming that the price cut and advertising campaign are successful at | increasing volume to the projected level, will the franchisees still earn their target profit of $5,700 per month? Show your calculations. Woo did franchise her restaurant concept. Because of Oriental Joy success, Noodles Galore has come on the scene as a competitor. To maintain its market share, Oriental Joy will have to lower its sales price to $5.25 per bowl. At the same time, Oriental Joy hopes to increase each restaurant's volume to 5,000 bowls per month by embarking on a marketing campaign. Each franchise will have to contribute $500 per month to cover the advertising costs. Prior to these changes, most locations were selling 4,500 bowls per month. Before franchising her Oriental Joy restaurant concept, owner Jackie Lo Woo had made the following assumptions. (Click the icon to view the assumptions.) Click the icon to view more information.) Read the requirements. Requirement 1. What was the average restaurant's operating income before these changes? Identify the formula labels and compute the operating income before the changes. Times: Contribution margin Less: Operating income Requirement 2. Assuming that the price cut and advertising campaign are successful at increasing volume to the projected level, will the franchisees still earn their target profit of $5,700 per month? Show your calculations. Identify the formula labels and compute the operating income after the changes. Times: Contribution margin Less: IL Operating income Cutting the sales price and advertising allow the franchise owners to earn their target profits of $5,700 per month