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You are thinking of opening a restaurant that will have six four-person tables. Each day that the restaurant is open, there are two lunch seatings
You are thinking of opening a restaurant that will have six four-person tables. Each day that the restaurant is open, there are two lunch seatings and three dinner seatings. The restaurant will remain closed on Mondays. The average lunch bill is $20 and you earn a 40% profit on lunch bills. The average dinner bil is $40 and you earn a 50% profit margin on dinner bills. Assume the fixed cost of running the restaurant as $400,000. Assuming 364 (7x52) days in a year, compute: a. how the profit changes as percentage of seats filled at each meal varies between 10% and 100% (in steps of 5%). b. how the analysis in part (a) changes as the fixed cost ranges from $350,000 to $450,000 (in steps of $25,000)
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