Calculate the profit for each alternative

Reference no: EM131974020

Problem

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:

	Monthly Volume Range (Number of Meals)	Total Fixed Costs
1 Lane	0-5,000	$	26,000
2 Lanes	5,001-8,000		31,000
3 Lanes	8,001-10,000		36,600

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?

Reference no: EM131974020

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