Eat N Eat shop operates sandwiches on the go in shopping malls. The average selling price of a sandwich is P100. The average cost of each sandwich is P60. A new mall is opening where the company wants to locate a shop but the location manager is not sure about the rent metho to accept. The mall operator offers two options for shop rentals as follow [1] paying a base rent of P40,000 plus 8% of revenue received, or [2] paying a base rent of P20,000 plus 20% of revenue received up to a maximum of P80,000. Eat N Eat will be indifferent between options 1 and 2 when its level of sales is:

Eat N Eat shop operates sandwiches on the go in shopping malls. The average selling price of a sandwich is P100. The average cost of each sandwich is P60. A new mall is opening where the company wants to locate a shop but the location manager is not sure about the rent metho to accept. The mall operator offers two options for shop rentals as follow [1] paying a base rent of P40,000 plus 8% of revenue received, or [2] paying a base rent of P20,000 plus 20% of revenue received up to a maximum of P80,000. Eat N Eat will be indifferent between options 1 and 2 when its level of sales 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

Similar questions

A work at home opportunity is available in which you will receive 3 percent of the sales for customers you refer to the company. The cost of your franchise fee is $600. How much would your customers have to buy to cover the cost of this fee?
1. Miracle Appliance is a wholesaler of kitchen appliances. You are the purchaser for a home store retailer. Miracle Appliance offers the KIT532 model refrigerator at a list price of $657. Miracle offers your company a trade discount of 25 percent. a. What is the amount of the discount for this refrigerator? b. What net price will you pay for this model refrigerator?
The president of Midnight Rambler wants to know if he should allow Jack Flash to have the scooters for $120,000. Determine the effect on profits from accepting Jack Flash’s offer. Briefly explain why certain costs should be omitted from the analysis in requirement (a.) Assume Midnight Rambler is operating at capacity and could sell the 300 scooters at its regular markup: Determine the Opportunity Cost of accepting Jack Flash’s offer. Determine the effect on profits of accepting Jack Flash’s offer What other factors should Midnight Rambler consider before deciding to accept the special order?
Franiuk Hotdogs and Grill normally sells hotdogs for $2.00 but also t-shirts with the name of the business and its logo prominently displayed for $10. The t-shirts haven't been selling that well lately, so Franiuk has decided to sell a combination of the t-shirt for $10 with a free hotdog. Donovan buys the combination of the t-shirt and the hotdog for $10 in cash. How should Franiuk account for the transaction? O Franiuk should recognize $10 revenue, comprised of $10 for the t-shirt, $2 for the hotdog, and $2 as a liability. Franiuk should recognize $12 revenue, comprised of $10 for the t-shirt, $2 for the hotdog, and $2 for discount expense. O Franiuk should recognize $10 revenue, comprised of $8.33 for the t-shirt, $1.67 for the hotdog. O Franiuk should recognize $10 revenue, comprised of $10 for the t-shirt, $0 for the hotdog.
Mr. Assad a Wholesaler buys a product from the Al Mazoon manufacturing company at RO 700 and pays VAT at the prescribed rate of 10%. a retailer buys a product from the wholesaler at RO 800 and the wholesaler charges VAT at the prescribed rate of 10%. The retailer fixes the price at RO 1000 and charges VAT at the same rate. Mr. Yousuf buys the product from the ABC LLC. What is the price including VAT that Mr. Yousuf has to pay to buy the Product? What is input tax and output tax? Discuss Amount of output tax for the retailer and wholesaler. How much VAT does the retailer pay to the government? VAT is different from sales tax system. Explain and give reason to your answer
1) Tom Rodgers is the director of purchasing of Dart Industries. Tom is responsible for booking 1,000 rooms per month in the city that houses his company’s corporate office. Tom approaches you, the DOSM/RM of the local Hawthorne Suites hotel, with a proposition. Instead of paying $159.99 per night; your hotel’s normal room rate for corporate travelers, he proposes the following rate structure: Per month Room Rate 1 to 100 $159.99 101 to 400 $139.99 401 to 600 $119.99 601 to 1,000 $109.99 A. Calculate the room revenue your hotel would receive if Tom booked: Room Purchased ADR Total Revenue 250 rooms Q1 Q2 350 rooms Q3 Q4 401 rooms Q5 Q6 B. Assume the variable cost associated with selling each room is $65.00. Calculate the “after variable costs” revenue your hotel would receive if Tom booked: Rooms Purchased Variable Cost @ $65 per room After variable cost Revenue 250 rooms Q7 Q8 350 rooms Q9 Q10 401 rooms Q11 Q12 2) You will find examples of…
Suppose you are the buyer for the housewares department of a department store. A number of vendors in your area carry similar lines of merchandise. On sets of microwavable serving bowls, Brand A offers a list price of $400 per dozen less a 35% trade discount. Brand B offers a similar set for a list price of $425 less a 42% trade discount. (a) Which vendor is offering the lower net price? Brand A Brand B (b) If you order 500 dozen sets of the bowls, how much money (in $) will be saved by using the lower-priced vendor?
Bridgeport Publishing Co. publishes college textbooks that are sold to bookstores on the following terms. Each title has a fixed wholesale price, terms f.o.b. shipping point, and payment is due 60 days after shipment. The retailer may return a maximum of 30% of an order at the retailer’s expense. Sales are made only to retailers who have good credit ratings. Past experience indicates that the normal return rate is 12%. The costs of recovery are expected to be immaterial, and the textbooks are expected to be resold at a profit. On July 1, 2020, Bridgeport shipped books invoiced at $15,100,000 (cost $12,080,000). Prepare the journal entry to record this transaction. (Credit account titles are automatically indented when amount is entered. Do not indent manually.If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit (To recognize revenue.)…
Look at the question below
An electronic retailer developing a model for insurance policies on new phone purchases. It estimates that 60 %customers never make a claim. 25% of customers require a small repair costing an average of $50 and 15 %of customers request a full refund costing $200. What is the long term average cost the retailer should expect to pay to its customers.
The Garden Shoppe buys hedge trimmers from a wholesaler and sells them to customers at a retail price of $417.96 each. The Garden Shoppe earns a 37% markup on its cost for this hedge trimmer. Calculate The Garden Shoppe's cost for one hedge trimmer. (Rounding: penny.)
Lisa is considering upgrading the breakfast service to attract more business and increase prices. This will cost an additional $14 for food costs per person per night. She feels she can increase the room rate to $101.00 per person per night. Determine the quantity of rentals and the sales revenue Lisa needs to break even if the changes are made. (Round answers to O decimal places, e.g. 5,275.)