Javier is a lawyer who wants to ran a restaurant. So Javier rented a place for 1

Question

Javier is a lawyer who wants to ran a restaurant.

So Javier rented a place for 10400 euro per year.

Hired a waitress, wage is 20 euro per hour, and 30 euro per hour after 40 hours.

Promised waitress 600 euro a week regardless if the restaurant open or not.

For unknown reason, Javier can only created 10 meal per hour.

Cost of raw material is 6 euro per meal

Cost of furnace is 10 euro per hour, but can be opened at 6-minute intervals so cost is 1 euro per meal.

Javier earns 800 euro a week as a lawyer, and can work when he is not operating his restaurant, but he cannot practice law and keep the restaurant open during the same week.

Classify all different types of costs: fixed, variable, or sunk costs.

1. What is the scheme of the marginal cost for meal a week?

2. Which is the average meal cost this week if 370 meals are cooked?

3.What is the minimum price below whcih the restaurant should close?

4. How many meals per week would Javier cook if the price Cadaques was 9.75 euros?

Explanation / Answer

C6 =C4-C5+B10   

C7 =ROUNDUP(C6*0.2/C3/7.5,0)

C8 =C11*7.5*C3/0.2   

C9 =MAX(0,-B10-C4+C5+C8)   

C10 =MAX(0,B10+C4-C5-C8)

C11 =B11+C12-C13

C16 =C8*10

C17 =C9*2

C18 =C10*1

C19 =C12*200

C20 =C13*350

C21 =C11*C3*8*10

C22 =SUM(C16:C21)

All the above formula are copied upto H column of the respective row.

H24 =SUM(C22:H22)

b) Level plan - In this plan, workers are hired or fired only in the first month (Sep). Thereafter workforce is kept level.

Level workforce required = (Total demand over six month period - Starting inventory)*0.2/(total working days available over the six month period*7.5) = (20700-1500)*0.2/(113*7.5) = 4.53 ~ 5 (rounded up)

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