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solmaris [256]
4 years ago
11

Shaniqua s restaurant utilizes a contribution margin pricing system. She would like the selling price of a new menu item she is

introducing to be $10.00. Her required contribution margin is $4.00. Her labor costs are 30%. What is the amount her kitchen staff can spend on product cost when making the item?
Business
1 answer:
Setler79 [48]4 years ago
7 0

Answer:

Her kitchen Staff can spend up to $3.00 on product cost.

Explanation:

Selling price= $10.00

Margin= $4.00

Labor costs = $10.00*30% = $3.00

Selling Price = Contribition margin + Labor costs + Product Cost.

Isolating Product cost from the equation:

Product cost = Selling price - (Contribution margin + Labor costs)

Product cost = $ 10.00 - ($4.00 + $3.00)

Product cost = $ 10.00 - $7.00

Product cost = $ 3.00

The max. amount that kitchen staff can spend on product cost is: $ 3.00

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vesna_86 [32]

Answer:

C) breaks even.

Explanation:

Cost-volume-profit analysis is also known as the break even analysis, it is an important tool in predicting the volume of activity, the costs to be incurred, the sales to be made, and the profit to be earned is. It is used to determine how changes in differing levels of activities such as costs and volume affect a company's operating income and net income.

Hence, if revenues are greater than total variable costs of production but less than total costs, a firm breaks even because the amount of money being generated is greater than the cost of running the business.

8 0
3 years ago
Read 2 more answers
Suppose that the quantity of DVD players sold increased from 200 to 400 when the price fell from $225 to $175. Over this price r
Nataly_w [17]

Answer:

Option D.

Explanation:

Given information:

Q_1=200, Q_2=400

P_1=225, P_2=175

Formula for price elasticity of demand is

E_d=\frac{Q_2-Q_1}{P_2-P_1}\times \frac{P_1+P_2}{Q_1+Q_2}

Substitute the given values in the above formula.

E_d=\frac{400-200}{175-225}\times \frac{225+175}{200+400}

E_d=\frac{200}{-50}\times \frac{400}{600}

E_d=-\frac{8}{3}

E_d\approx -2.67

Absolute value is

|E_d|= |-2.67|=2.67

The absolute value of the price elasticity of demand for DVD players is 2.67.

Therefore, the correct option is D.

6 0
3 years ago
Which lists the Business, Management, and Administration careers in order from highest level of education typically required to
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Answer:

Operations Research Analyst, Accountant, Data Entry Clerk, Intern

Explanation:

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Interns are mostly college students. Since they have not graduated, they should have the least educational qualification, followed by clerks.

5 0
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(this circumtances won't happen if the reason you lost the money is the firm going into bankruptcy)
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3 years ago
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What's the question with the statement?
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