Answer:
a. Current average cos per meal = $5.6
b. how the owner arrived at the $0.60 figure is explained in the explanation part, but on the comment, the owner is focused on the unit price of the meals, which helps him determine quickly if he makes a profit or loss
c. The restaurant owner should not accept the offer
Explanation:
a. To calculate the average cost per meal, we have to determine the total cost used in producing the meals per day, and divide it by the total number of meals per day;
Total fixed cost per day = $1,200
variable cost per meal = $4
meals per day = 750
therefore total variable cost per day = 4 × 750 = $3,000
∴ Total cost per day = total fixed cost + total variable cost
= 1,200 + 3,000 = $4,200.
Next, we will find the total cost of making a meal per day, using the total fixed cost amount. It is calculate thus;
Cost of 1 meal per day = Total cost per day ÷ number of meals made per day
= 4,200 ÷ 750 = $5.6
b. if the scout leader offers a price of $150 for a total of 30 girl, to determine whether a profit or loss is made, let us first calculate how much it takes to make the meals for the 30 girls.
remember that from a above, cost of meal for 1 person = $5.6
therefore cost of meals for 30 girls = 5.6 × 30 = $168
so if the owner agrees to this offer, he will make a loss, which is calculate as; cost price - selling price = 168 - 150 = $18
so the offer produces a total loss of $18 for the 30 girls (30 meals)
but the owner stated the loss as loss per meal, so since 30 meals produced a loss of $18, therefore, 30 meals = 18 ÷ 30 = $0.6
c. remember that the cost of making a meal = $5.6, if the business owner accepts an offer of $4.5 per meal, he will be making a loss of; 5.6 - 4.5 = $1.1 on each meal. so he should reject the offer
