SOLUTION: a restaurant serves meals at an average price of $12. the variable cost of each meal is $8 and fixed costs of running the restaurant amount to $400 per day.
i) if the restaurant s
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Question 984611: a restaurant serves meals at an average price of $12. the variable cost of each meal is $8 and fixed costs of running the restaurant amount to $400 per day.
i) if the restaurant sold 150 meals per day, determine the daily profit the restaurant would make
ii) how many meals should the restaurant aim to serve each day inorder to break even
iii) if the restaurant were making a loss of $200 per day, what increase in the number of meals served would be required to break even?
Answer by ankor@dixie-net.com(22740) (Show Source): You can put this solution on YOUR website!
a restaurant serves meals at an average price of $12.
the variable cost of each meal is $8 and fixed costs of running the restaurant amount to $400 per day.
:
i) if the restaurant sold 150 meals per day, determine the daily profit the restaurant would make
Let x = no. of meals sold
Profit is the revenue (12x) minus the cost (8x+400)
p(x) = 12x - (8x+400)
p(x) = 12x - 8x - 400 (removing the bracket changes the sign
p(x) = 4x - 400
If x = 150
p(x) = 4(150) - 400
p(x) = 600 - 400
p(x) $200 profit off of 150 meals
:
ii) how many meals should the restaurant aim to serve each day inorder to break even
That's when revenue = cost
12x = 8x + 400
12x - 8x = 400
4x = 400
x = 100 meals to break even
:
iii) if the restaurant were making a loss of $200 per day, what increase in the number of meals served would be required to break even?
a loss is a negative profit, find how many meals sold for a $200 loss
Use our profit equation to find x
4x - 400 = -200
4x = -200 + 400
4x = 200
x = 200/4
x = 50 meals cause a $200 loss
we know the break-even point is 100 meals therefore a 50 meal increase is required.
:
;
Made sense, right?
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