Solution-How many meals must be served

How many meals must be served

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Reference no: EM133003367

Question - TU owns and operates a food outlet. Their fixed costs are $21,000 per month and serves luncheons and dinners. The average total bill (excluding tax and tip) is $18 per customer. TU's present variable costs average $9.60 per meal.

Required -

1. What is the break-even point in number of meals served per month?

2. TU's rent and other fixed costs rise to a total of $29,400 per month. If variable costs rise to $11.50 per meal and if Genevieve increases her average price to $22, how many meals must be served to make $8,400 profit per month?

3. TU's accountant thinks that they may lose 10% of her costumers if prices are increased to $22. If this should happen what would be TU's profit per month? Assume that the restaurant had been serving 3,500 costumers per month.

Reference no: EM133003367

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How many meals must be served

Reference no: EM133003367

Reference no: EM133003367

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