Owner Shirl Low is considering franchising her Noodles by Low restaurant concept. She believes people will pay $8.00 for a large bowl of noodles. Variable costs are $4.80 per bowl. Low estimates monthly fixed costs for a franchise at $12,000. Read the requirements LOADING... . 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.) ( + ) ÷ = Required sales in dollars Requirements 1. Use the contribution margin ratio approach to find a franchise's breakeven sales in dollars. 2. Low believes most locations could generate $91,250 in monthly sales. Is franchising a good idea for Low if franchisees want a minimum monthly operating income of $19,500? Explain your answer.
Owner Shirl Low is considering franchising her Noodles by Low restaurant concept. She believes people will pay $8.00 for a large bowl of noodles. Variable costs are $4.80 per bowl. Low estimates monthly fixed costs for a franchise at $12,000. Read the requirements LOADING... . 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.) ( + ) ÷ = Required sales in dollars Requirements 1. Use the contribution margin ratio approach to find a franchise's breakeven sales in dollars. 2. Low believes most locations could generate $91,250 in monthly sales. Is franchising a good idea for Low if franchisees want a minimum monthly operating income of $19,500? Explain your answer.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Owner
Shirl Low
is considering franchising her Noodles by
Low
restaurant concept. She believes people will pay
$8.00
for a large bowl of noodles. Variable costs are
$4.80
per bowl.
Low
estimates monthly fixed costs for a franchise at
$12,000.
Read the
requirements
LOADING...
.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.)
(
|
|
+
|
|
) ÷
|
|
=
|
Required sales in dollars
|
Requirements
1.
|
Use the contribution margin ratio approach to find a franchise's breakeven sales in dollars.
|
2.
|
Low
believes most locations could generate
$91,250
in monthly sales. Is franchising a good idea for
Low
if franchisees want a minimum monthly operating income of
$19,500?
Explain your answer. |
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