A restaurant prepares 200.00 pizza slices and sells them at a rate of $14.00/sli

Question

A restaurant prepares 200.00 pizza slices and sells them at a rate of $14.00/slice. Expenses for the restaurant include raw material for pizza at $6.00 per slice, $125.00 as monthly rental and $31.00 monthly as insurance. Restaurant is open only for 25 days in a month. Today there was a party at nearby office so the demand for pizza went up to 223.00 slices. Due to lack of availability vendor could not fulfill the demand and analyzed a lost sale as $4.00 per item. How much profit could the restaurant earn today? A restaurant prepares 200.00 pizza slices and sells them at a rate of $14.00/slice. Expenses for the restaurant include raw material for pizza at $6.00 per slice, $125.00 as monthly rental and $31.00 monthly as insurance. Restaurant is open only for 25 days in a month. Today there was a party at nearby office so the demand for pizza went up to 223.00 slices. Due to lack of availability vendor could not fulfill the demand and analyzed a lost sale as $4.00 per item. How much profit could the restaurant earn today? A restaurant prepares 200.00 pizza slices and sells them at a rate of $14.00/slice. Expenses for the restaurant include raw material for pizza at $6.00 per slice, $125.00 as monthly rental and $31.00 monthly as insurance. Restaurant is open only for 25 days in a month. Today there was a party at nearby office so the demand for pizza went up to 223.00 slices. Due to lack of availability vendor could not fulfill the demand and analyzed a lost sale as $4.00 per item. How much profit could the restaurant earn today? A restaurant prepares 200.00 pizza slices and sells them at a rate of $14.00/slice. Expenses for the restaurant include raw material for pizza at $6.00 per slice, $125.00 as monthly rental and $31.00 monthly as insurance. Restaurant is open only for 25 days in a month. Today there was a party at nearby office so the demand for pizza went up to 223.00 slices. Due to lack of availability vendor could not fulfill the demand and analyzed a lost sale as $4.00 per item. How much profit could the restaurant earn today?

Explanation / Answer

Total Fixed cost per month = 125 + 31 = 156

Thus per day = 156 / 25 days of working = 6.24 per day

Actual profit earned = 200 items sold * ( selling price - variable cost) - Fixed cost per day

= 200 * ( 14 - 6 ) - 6.24 = 1600 - 6.24 =  1593.76

How much profit could the restaurant earn today?

The term could earn includes the oppurtunity loss also

= Earned profit + oppurtunity loss  

= 1593.76 + 23 units * 4 per unit = 1593.76 + 92 = 1685.76.................final answer

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