You own a restaurant, your capacity is 100 dinners a day. Your regular price is $30 per dinner. Your variable costs are $10 per dinner. Your fixed costs are $500 per day.On Mondays, business is slow, so you expect to sell only 40 dinners (i.e., you have a lot of unused capacity).Special order: a one-time order that is not considered part of the company's normal ongoing business.A charity organization wants to hold its fundraising dinner in your restaurant on Monday. They offer to pay $15 per dinner, for a total of 50 dinners.Should you take this special order?Why or why not?

Answered: Image /qna-images/answer/fa0cbbb3-d415-45ce-bfc2-5cf2c7ad63d5.jpg

Answered: You own a restaurant, your capacity is…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Concept explainers

Question

You own a restaurant, your capacity is 100 dinners a day. Your regular price is $30 per dinner. Your variable costs are $10 per dinner. Your fixed costs are $500 per day.
On Mondays, business is slow, so you expect to sell only 40 dinners (i.e., you have a lot of unused capacity).
Special order: a one-time order that is not considered part of the company's normal ongoing business.
A charity organization wants to hold its fundraising dinner in your restaurant on Monday. They offer to pay $15 per dinner, for a total of 50 dinners.

Should you take this special order?

Why or why not?

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions