12. A restaurant prepares 200.00 pizza slices and sells them at a rate of $10.00
ID: 395404 • Letter: 1
Question
12. A restaurant prepares 200.00 pizza slices and sells them at a rate of $10.00/slice. Expenses for the restaurant include raw material for pizza at $5.00 per slice, $118.00 as monthly rental and $41.00 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 219.00 slices. Due to lack of availability vendor could not fulfill the demand and analyzed a lost sale as $6.00 per item. How much profit could the restaurant earn today?
13. A restaurant sells pizza at a rate of $10.87/slice. Expenses for the restaurant include raw material for pizza at $5.87 per slice, $114.00 as monthly rental and $50.00 monthly as insurance. How many slices should the restaurant sell in a month to break even?
15. For a table manufacturing company, selling price for a table is $184.00 per Unit, Variable cost is $30.00 per Unit, rent is $4,861.00 per month and insurance is $230.00 per month. Company wants to expand its business and improve the table quality, it wants to increase the selling price for a table to $252.00 per Unit, Variable cost to $48.00 per Unit, bigger area will have rent $5,058.00 per month and insurance is $405.00 per month At what point will the company be indifferent between the current mode of operation and the new option?
16. A restaurant prepares 200.00 pizza slices and sells them at a rate of $15.00/slice. Expenses for the restaurant include raw material for pizza at $4.00 per slice, $112.00 as monthly rental and $29.00 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 221.00 slices. Due to lack of availability vendor could not fulfill the demand and analyzed a lost sale as $5.00 per item. How much profit could the restaurant earn today?
17. You run a school in Florida. Fixed monthly cost is $5,641.00 for rent and utilities, $6,302.00 is spent in salaries and $1,370.00 in insurance. Also every student adds up to $95.00 per month in stationary, food etc. You charge $690.00 per month from every student now.
You are considering moving the school to another neighborhood where the rent and utilities will increase to $11,865.00, salaries to $6,533.00 and insurance to $2,088.00 per month. Variable cost per student will increase up to $152.00 per month. However you can charge $1,151.00 per student. At what point will you be indifferent between your current mode of operation and the new option?
Explanation / Answer
12.
Profit on 200 pizza slices = 200 * (selling price $10 – raw material cost incurred $5) * Number of days 25 – monthly rental $ 118 – insurance $41
= 200*(10-5)*25 – (118+41)
= $24,841
Per day profit = 24841/25 = 993.64
Lost Sale = (219-200) * $6 = $114
Profit made by the restaurant today = $993.64 - $114 = $879.64
note: as per chegg guidelines only one question can be answered at one time.
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