Owner Shirl Low is considering franchising her Noodles by Low restaurant concept. She believes people will pay $ 5.00 for a large bowl of noodles. Variable costs are $ 2.00 per bowl. Low estimates monthly fixed costs for a franchise at $ 3000 Owner Shirl Low is considering franchising her Noodles by Low restaurant concept. She believes people will pay $5.00 for a large bowl of noodles. Variable costs are $2.00 per bowl. Low estimates monthly fixed costs for a franchise at $3,000.Read the requirements.Requirement 1. Use the contribution margin ratio approach to find a franchise's breakeven sales in dollars.Begin by showing the formula and then entering the amounts to calculate the breakeven point in sales dollars using the contribution margin approach. (Enter a "0" for any zero balances. Abbreviation used: CM = contribution margin.)(Fixed costs + Target profit▼CM ratio= Required sales in dollars) +) +($ 3,000 + $ 060= $5,000C%+Requirement 2. Low believes most locations could generate $41,500 in monthly sales. Is franchising a good idea for Low if franchisees want a minimum monthly operating income of $15,000? Explain your answer.Begin by showing the formula and then entering the amounts to calculate the targeted sales dollars required to earn the minimum monthly operating income of $15,000. (Abbreviation used: CM = contribution margin.)=)+Required sales in dollarsRequirements1.Use the contribution margin ratio approach to find a franchise's breakevensales in dollars.2. Low believes most locations could generate $41,500 in monthly sales. Isfranchising a good idea for Low if franchisees want a minimum monthlyoperating income of $15,000? Explain your answer.PrintDoneX

The contribution margin ratio is the percentage difference between a company's revenue and variable…

Owner Shirl Low is considering franchising her Noodles by Low restaurant concept. She believes people will pay $ 5.00 for a large bowl of noodles. Variable costs are $ 2.00 per bowl. Low estimates monthly fixed costs for a franchise at $ 3000

Owner Shirl Low is considering franchising her Noodles by Low restaurant concept. She believes people will pay $ 5.00 for a large bowl of noodles. Variable costs are $ 2.00 per bowl. Low estimates monthly fixed costs for a franchise at $ 3000

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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