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7-Eleven operates a number of convenience stores worldwide. Assume that an analysis of operating costs, customer sales, and customer patronage reveals the following: $80,000/year Fixed costs per store Variable cost ratio Average sale per customer visit Average customer visits per week Customers as portion of city population 0.80 $17.00 1.50 0.05 Determine the city population required for a single 7-Eleven to earn an annual profit of $40,000.

7-Eleven operates a number of convenience stores worldwide. Assume that an analysis of operating costs, customer sales, and customer patronage reveals the following: $80,000/year Fixed costs per store Variable cost ratio Average sale per customer visit Average customer visits per week Customers as portion of city population 0.80 $17.00 1.50 0.05 Determine the city population required for a single 7-Eleven to earn an annual profit of $40,000.

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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Customer-Level Planning 7-Eleven operates a number of convenience stores worldwide. Assume that an analysis of operating costs, customer sales, and customer patronage reveals the following: $80,000/year Fixed costs per store Variable cost ratio Average sale per customer visit Average customer visits per week Customers as portion of city population 0.80 $17.00 1.50 0.05 Determine the city population required for a single 7-Eleven to earn an annual profit of $40,000. Round annual contribution per customer to two decimal places. For customers required for desired profit and required population, round up to the nearest whole number (i.e., 325.333 customers = 326) Annual contribution per customer $ 120000 Customers required for desired profit Required population 9050
Transcribed Image Text:Customer-Level Planning 7-Eleven operates a number of convenience stores worldwide. Assume that an analysis of operating costs, customer sales, and customer patronage reveals the following: $80,000/year Fixed costs per store Variable cost ratio Average sale per customer visit Average customer visits per week Customers as portion of city population 0.80 $17.00 1.50 0.05 Determine the city population required for a single 7-Eleven to earn an annual profit of $40,000. Round annual contribution per customer to two decimal places. For customers required for desired profit and required population, round up to the nearest whole number (i.e., 325.333 customers = 326) Annual contribution per customer $ 120000 Customers required for desired profit Required population 9050
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