Question

Check my work 8 Sam's Sushi serves only a fixed-price lunch. The price of $9 and the variable cost of $4 per meal remain constant regardless of volume. Sam can increase lunch volume by opening and staffing additional check-out lanes. Sam has three choices, as follows. 1.11 oints Monthly Volume Range (Number of Meals) 0-5,000 5,001-8,000 8,001-10,000 1 Lane 2 Lanos 3 Tanes Total Fixed Costa $ 27,000 30,000 36,000 Skipped eBook Print Required: a. Calculate the break-even point(s). b-1. Calculate the profit (or loss) for each alternative, assuming Sam can sell all the meals he can serve. b-2. Should Sam operate at one, two or three lanes? References Complete this question by entering your answers in the tabs below. Req A Reg B1 Reg B2 Calculate the break-even point(s). 1 lane 2 lanes 3 lanes Break-Even Points meals meals meals

Answer 1

a)

Breakeven point = FC/(SP-VC)

Description	FC ($)	SP ($)	VC ($)	BE Point
1 Lane	27,000	9	4	5400
2 Lanes	30,000	9	4	6000
3 Lanes	36,000	9	4	7200

b-1)

Profit/(loss) = [Meals Served * (SP-VC)] - FC

Description	Meals served	SP ($)	VC ($)	FC ($)	Profit/ (Loss) ($)
1 Lane	5000	9	4	27,000	(2,000)
2 Lanes	8000	9	4	30,000	10,000
3 Lanes	10000	9	4	36,000	14,000

b-2)

Sam should operate at 3 lanes as the profit is maximum at 3 lanes.