Refer to Scenario 9.3 below to answer the question(s) that follow.
SCENARIO 9.3: Investors put up $520,000 to construct a building and purchase all equipment for a new restaurant. The investors expect to earn a minimum return of 10 per cent on their investment. The restaurant is open 52 weeks per year and serves 900 meals per week. The fixed costs are spread over the 52 weeks (i.e. prorated weekly) . Included in the fixed costs is the 10% return to the investors and $1,000 per week in other fixed costs. Variable costs include $1,000 in weekly wages and $600 per week for materials, electricity, etc. The restaurant charges $5 on average per meal.
-Refer to Scenario 9.3. Total fixed costs per week are
A) $1,000.
B) $2,000.
C) $3,000.
D) $4,500.
Correct Answer:
Verified
Q1: Refer to Scenario 9.2 below to answer
Q2: Assume firms break even in an industry.
Q3: Refer to Scenario 9.3 below to answer
Q4: Refer to Scenario 9.3 below to answer
Q5: Refer to Scenario 9.3 below to answer
Q7: Refer to Scenario 9.3 below to answer
Q8: Firms that are "breaking even" are
A) earning
Q9: Refer to Scenario 9.3 below to answer
Q10: Refer to Scenario 9.2 below to answer
Q11: Refer to Scenario 9.4 below to answer
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