A3 Two business students are considering opening a business sellinghamburgers next summer. The students view this as an alternative to takingsummer employment with a local firm where they would each earn £3,000during the three-month summer period. It would cost £2,000 to obtain alicence to operate their stand, £1,000 per month to rent the stand with thenecessary equipment and £100 per month for insurance. Petrol costs areestimated at £10 per day. Hamburger meat can be bought for £4.00 per kiloand buns (cuolall jus) cost £1.20 per dozen (10 pieces). The burgers wouldsell in 125 gram patties for £1.50 each.a. Find the accounting cost for the proposed business if they sell 100 burgersa day?b. Find the economic cost function for the proposed business if they sell 100burgers a day?c. If the students can sell 100 burgers a day, What is the economic profit theywould make in the three months (91 days). Advise them whether they shouldenter the business or not?

Accounting CostAccounting costs measure the actual monetary value of taking an expense decision.…

Answered: Two business students are considering…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 1EA: Garrison Boutique, a small novelty store, just spent $4,000 on a new software program that will help...

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