The marketing team of "Hi" restaurant reduced the price of their special triple-decker with double cheese Gut Bomb from $4.35 to $3.75 in the hope of stimulating sales during the month of March. The total fixed costs of the restaurant increased by $5,700 in March due to the promotion of the special in the local press and printing advertising leaflets to be used inside the restaurants. The variable costs of the Gut Bomb remained the same at $1.47 per item. How many Gut Bomb specials must be sold during March to break-even with this new program?

The marketing team of "Hi" restaurant reduced the price of their special triple-decker with double cheese Gut Bomb from $4.35 to $3.75 in the hope of stimulating sales during the month of March. The total fixed costs of the restaurant increased by $5,700 in March due to the promotion of the special in the local press and printing advertising leaflets to be used inside the restaurants. The variable costs of the Gut Bomb remained the same at $1.47 per item. How many Gut Bomb specials must be sold during March to break-even with this new program?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter8: Cost Analysis

Section: Chapter Questions

Problem 5E

See similar textbooks

Similar questions

Based on a predicted level of production and sales of 16,000 units, a company anticipates total variable costs of $78,400, fixed costs of $27,200, and operating income of $34,080. Based on this information, the budgeted amount of variable costs for 13,000 units would be: A) $165,192 B) $27,200 C) $61,280 D) $63,700 E) $78,400
Zabrina has started her own company, Lockey, which manufactures imprinted jeans. Since he just begun this operation, he rents the equipment from a local printing shop when necessary. The cost of using the equipment is P3,000. The materials used in one jean cost P200, and he can sell it at 350. Requirements: Provide for a mathematical model that will show how to maximize the profit.
A factory manager is planning for the manufacture of plywood to be sold overseas. The fixed cost of operation is estimated at $800,000 per month while the variable cost is $155 per thousand board feet of plywood. The selling price will depend on how much will be produced and sold and is determined by the relationship, price per thousand board feet, p = $600 – 0.05D, where D is the amount produced and sold in thousands of board feet. Determine the monthly production that will maximize the total profit and corresponsding price. Dettermine also the corresponding maximum profit per month. A) For maximum profit, (to the nearest unit) thousands of board feet per month must be produced and sold at per thousand board feet of plywood.(Round to the nearest cent.) B) The maximum profit per month is equal to $
Which one is corect? An understanding of the underlying behavior of costs helps in all of the following EXCEPT: sales volume can be better estimated process inefficiencies can be better identified and as a result improved true costs can be better evaluated costs can be better estimated as volume expands and contracts
Sales of bottled water in the United States totaled 34.0 gallons per person in 2014. Evian, a high-quality natural spring water, costs about 60¢ per bottle, while a local brand of purified municipal water may cost only 25¢ per bottle. On average, a local municipal water utility may provide drinkable tap water for $2.90 per 1000 gallons. If the average person drinks two bottles of water per day or uses 5 gallons per day to obtain the same amount of water from the tap, what are the present worth values per person for 1 year of drinking tap water versus bottled water using (a) Evian, and (b) local-brand bottled water? Use an interest rate of 6% per year, compounded monthly, and 30 days per month.
Alpha Associates has the following details:Fixed cost = $20,00,000Variable cost per unit = $ 100Selling price per unit = $ 200 if the actual production quantity is 60,000, Contribution = ?
XYZ Enterprises produce slippers in 10 different designs. It takes one hour (and PhP20,000) to set up between designs and, after setting up, they can produce 1,000 units of a particular design per hour (at a cost of PhP9,000). Does this production exhibit scale economies or scope economies?
Identify the following cost elements as first-cost (FC) components or annual operating cost (AOC) components for a piece of equipment in a chemical processing plant: rent, direct labor, equipment overhaul, overhead, supplies, insurance, equipment cost, utility cost, installation, delivery charges, salaried personnel, and periodic safety training.
The Department of Defense uses area cost factors (ACFs) to compensate for differences in construction costs in different parts of the country and world. The ACF for Andros Island in the Bahamas is 1.70 while the ACF for Rapid City, South Dakota, is 0.93. If a cold storage processing warehouse costs $1,350,000 in Rapid City, what is the estimated cost of the same facility on Andros Island?
enata and Jerome operate a company that makes miniature electronic surveillance drones from a warehouse in an industrial estate. Each drone costs them $49 to make and has additional fixed costs of $275 (per drone). On average, Renata and Jerome sell 85 drones per week for a price of $64 each. Renata and Jerome then decide to have a sale and reduces the price of each drone to an even numbered price between $54 and $60 inclusive. During the sale, they sell on average 150 devices per week. Q.Plot Total Cost, Total Revenue and Profit Functions on the same set of axes and Find the Marginal Revenue (MR) and Marginal Cost (MC) functions by differentiation and determine the level of output q at which MR = MC. With reference to your Excel plot, what conclusion can you make about this value?
Company A has fixed expenses of Php 15,000 per year and each unit of product has a Php 0.002 variable cost. Company B has fixed expenses of php 5000 per year and can produce the same product at a php 0.05 variable cost. At what number of units of annual production will Company A have the same overall cost as Company B?
A production job methodology in an industry needs to be revisited. An industrial engineer has designed two alternative methods for accomplishing a production job. Both methods involve the acquisition of the same working place and other capital equipment to be used for this job only. Method A calls for a crew consisting of three men each costing P30.00 per hour. This method will result in the production of 10 units per hour of which two will be reject. Method B calls for a crew of two men each costing P35.00 per hour and should result in the production of eight units per hour of which one will be reject. The cost of the direct material lost in each reject is P20.00. If a certain total number of units is to be produced, find which method is economical. Group of answer choices Method B Method A