The owner of Queens Restaurant is disappointed because the restaurant has been averaging 8.000 pizza sales per month, but the restaurant and wait staff can make and serve 10.000 pizzas per month. The variable cost (for example, ingredients) of each pizza is $1.45. Monthly fixed costs (for example, depreciation, property taxes, business license. and manager's salary) are $10.000 per month. The owner wants cost information about different volumes so that some operating decisions can be made (Click the icon to view the chart for Requirement 1.) Read the requirements Requirement 1. Use the chart below to provide the owner with the cost information. Then use the completed chart to help you answer the remaining questions. (Enter total variable costs to the nearest dollar. Enter costs per pizza, price per pizza, and profit per pizza to the nearest cent) Monthly pizza volume.. 5.000 8.000 10.000 Total fixed costs Total variable costs Total costs Fixed cost per pizza Variable cost per pizza Average cost per pizza 8.000 pizzas 10.000 pizzas Since the restaurant will generate the volume $ 6.25 S 6.25 S of Selling price per pizza. Average profit per pizza Requirement 2. From a cost standpoint, why do companies such as Queens Restaurant want to operate near or at full capacity? Companies want to run at full capacity to better utilize the resources they spend on costs. The more units they produce the Requirement 3. The owner has been considering ways to increase the sales volume. The owner thinks that 10.000 pizzas could be sold per month by cutting the selling price per pizza from $8.25 to $5.75. How much extra profit (above the current level) would be generated if the selling price were to be decreased? (Hint: Find the restaurants current monthly profit and compare it to the restaurant's projected monthly profit at the new sales price and volume.) Identify the profit formula and compute the monthly profit at the current and the new volume. 6.25 Monthly profit the owner should the sales price to the Data table cost per unit Monthly pizza volume Total fixed costs Total variable costs Total costs... Fixed cost per pizza Variable cost per pizza vanadie cost per Average cost per pizza Selling price per pizza. Average profit per pizza 5.000 8.000 10.000 Print $ 6.25 $ 6.25 $ 6.25 Done

You are the manager of an apartment complex with 100 units. When you set the rent at $1600 per month, all apartments are rented. As you increase rent by $50 per month, on average, 2 fewer apartments are rented. Maintenance costs run $200 per month for each occupied unit. What is the rent that maximizes the total amount of profit? Answer:

The manager of a car wash must decide whether to have one or two wash lines. One line will mean a fixed cost of $5,600 a month, and two lines will mean a fixed cost of $9,520 a month. Each line would be able to process 15 cars an hour. Variable costs will be $3 per car, and revenue will be $5.95 per car. The manager projects an average demand of between 14 and 18 cars an hour. Would you recommend one or two lines? The car wash is open 280 hours a month.. Choose line

Diversified Investor Group is opening an office in Portland, Oregon. Fixed monthly costs are office rent ($8,800), depreciation on office furniture ($2,000), utilities ($2,100), special telephone lines ($1,500), a connection with an online brokerage service ($2,700), and the salary of a financial planner ($10,900). Variable costs include payments to the financial planner (9% of revenue), advertising (11% of revenue), supplies and postage (4% of revenue), and usage fees for the telephone lines and computerized brokerage service (6% of revenue). Read the requirements. Requirement 2. Use the equation approach to compute the dollar revenues needed to earn a monthly target profit of $11,200. Begin by selecting the formula to compute the required sales in units to earn a target profit. = Target profit Rearrange the formula you determined above and compute the required number of trades to earn a monthly target profit of $11,200. Diversified must make trades to earn a monthly operating income…