Ask Question
19 August, 13:48

Lance's Diner has a hot-lunch special each weekday and Sunday afternoon. The cost of food and other variable costs for each meal served is $3.50; weekly fixed costs (e. g., building depreciation and equipment rental costs) are $6,000, regardless of how many days the diner is open per week. Lance has an average of 500 customers per day.

a. What is the lowest price in total (not per meal) that Lance should charge for a special group of 200 that wants to come on Saturday for a family reunion?

b. What should be the lowest price per meal that Lance should charge for the hot-lunch special served on weekdays and Sunday afternoons?

+1
Answers (1)
  1. 19 August, 15:25
    0
    (a) $700

    (b) $5.50

    Explanation:

    Weekly fixed costs = $6,000

    Weekly Total meals = Average customers per day * No. of days

    = 500 * 6

    = 3,000

    Fixed cost per meal = Weekly fixed costs : Weekly Total meals

    = $6,000 : 3,000

    = $2

    (a) Lowest price in total = Number of customers * Variable costs for each meal

    = 200 * $3.50

    = $700

    (b) Lowest price = Variable costs for each meal + Fixed cost per meal

    = $3.50 + $2

    = $5.50
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Lance's Diner has a hot-lunch special each weekday and Sunday afternoon. The cost of food and other variable costs for each meal served is ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers