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1. Fill in the following chart to provide the owner with the cost information. Then use the completed chart to help you answer the remaining questions. Monthly pizza volume 6,000 7,500 10,000 Total fixed costs.... ...4 $ Total variable costs Total costs.. .onbnee enimetea Fixed cost per pizza 2$ 2$ 2$ Variable cost per pizza Average cost per pizza.. Selling price per pizza $ 6.25 $ 6.25 $ 6.25 Average profit per pizza.. 2. From a cost standpoint, why do companies such as Marshall Restaurant want to oper- ate near or at full capacity? 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 $6.25 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 restaurant's current monthly profit and compare it to the restaurant's projected monthly profit at the new sales price and volume.) %24

1. Fill in the following chart to provide the owner with the cost information. Then use the completed chart to help you answer the remaining questions. Monthly pizza volume 6,000 7,500 10,000 Total fixed costs.... ...4 $ Total variable costs Total costs.. .onbnee enimetea Fixed cost per pizza 2$ 2$ 2$ Variable cost per pizza Average cost per pizza.. Selling price per pizza $ 6.25 $ 6.25 $ 6.25 Average profit per pizza.. 2. From a cost standpoint, why do companies such as Marshall Restaurant want to oper- ate near or at full capacity? 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 $6.25 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 restaurant's current monthly profit and compare it to the restaurant's projected monthly profit at the new sales price and volume.) %24

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. Fill in the following chart to provide the owner with the cost information. Then use the completed chart to help you answer the remaining questions. Monthly pizza volume 6,000 7,500 10,000 Total fixed costs.... ...4 $ Total variable costs Total costs.. .onbnee enimetea Fixed cost per pizza 2$ 2$ 2$ Variable cost per pizza Average cost per pizza.. Selling price per pizza $ 6.25 $ 6.25 $ 6.25 Average profit per pizza.. 2. From a cost standpoint, why do companies such as Marshall Restaurant want to oper- ate near or at full capacity? 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 $6.25 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 restaurant's current monthly profit and compare it to the restaurant's projected monthly profit at the new sales price and volume.) %24
Transcribed Image Text:1. Fill in the following chart to provide the owner with the cost information. Then use the completed chart to help you answer the remaining questions. Monthly pizza volume 6,000 7,500 10,000 Total fixed costs.... ...4 $ Total variable costs Total costs.. .onbnee enimetea Fixed cost per pizza 2$ 2$ 2$ Variable cost per pizza Average cost per pizza.. Selling price per pizza $ 6.25 $ 6.25 $ 6.25 Average profit per pizza.. 2. From a cost standpoint, why do companies such as Marshall Restaurant want to oper- ate near or at full capacity? 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 $6.25 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 restaurant's current monthly profit and compare it to the restaurant's projected monthly profit at the new sales price and volume.) %24
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