Refer to Scenario 9.10 below to answer the question(s) that follow.
SCENARIO 9.10: Investors put up $1,040,000 to construct a building and purchase all equipment for a new cafe. The investors expect to earn a minimum return of 10 percent on their investment. The cafe 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 $2,000 in other fixed costs. Variable costs include $2,000 in weekly wages, and $600 per week in materials, electricity, etc. The cafe charges $6 on average per meal.
-Refer to Scenario 9.10. Weekly total revenue is
A) $1,600.
B) $2,000.
C) $3,600.
D) $5,400.

Question

Quizplus · Accepted Answer

Weekly total revenue is calculated by multiplying the number of meals served per week by the average price per meal. Therefore, 900 meals per week * $6 per meal = $5,400.