The owner of Genuine Subs, Inc., hopes to expand the present operation by adding

Question

The owner of Genuine Subs, Inc., hopes to expand the present operation by adding one new outlet. She has studied three locations. Each would have the same labor and materials costs (food, serving containers, napkins, etc.) of $1.60 per sandwich. Sandwiches sell for $2.67 each in all locations. Rent and equipment costs would be $5,000 per month for location A, $5,590 per month for location B, and $5,730 per month for location C.

Determine the volume necessary at each location to realize a monthly profit of $10,000. (Do not round intermediate calculations. Round your answer to the nearest whole number.)

If expected sales at A, B, and C are 20,600 per month, 22,300 per month, and 22,700 per month, respectively, calculate the profit of the each locations? (Omit the "$" sign in your response.)

Which location would yield the greatest profits?

a.

Determine the volume necessary at each location to realize a monthly profit of $10,000. (Do not round intermediate calculations. Round your answer to the nearest whole number.)

Explanation / Answer

A)

B)

Location C will get us maximum profit

A B C Rent & equipment cost 5000 5590 5730 selling price 2.67 Labor and material cost 1.6 Profit 1.07 Profit (1.07 x "X")-5000 (1.07 x "X")-5590 (1.07 x "X")-5730 Volume necessary for $ 10000 profit each location 14018.69 14570.09 14700.93

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