2) A restaurant has the following cost structure:
Cost Item
Rent
Wages
Utilities
Equipment (Depreciation)
Average ingredient cost per dish
Average direct labor cost per dish
$100 per day
$500 per day
$50 per day
$300 per day
$5 per dish
$1 per dish
A) If the average price of a dish is $15, how many dishes should the restaurant sell to break
even?
FC: Rent ($100) + Wages ($500) + Utilities ($50) + Equipment ($300)= $950
P: $15
q: ?
VC:
B) If the restaurant wants to make $400 profit per day, how many dishes should the restaurant
sell to break even?
C) If the restaurant wants to make $400 profit per day and cannot sell more than 120 dishes a
day, what should be the average price of a dish?
