What is the incremental profit per bus-tour meal

Assignment Help Financial Accounting
Reference no: EM132843424

Problem - Special-Order Pricing Barry's Bar-B-Que is a popular lunch-time spot. Barry is conscientious about the quality of his meals, and he has a regular crowd of 500 patrons for his $11.90 lunch. His variable cost for each meal is about $3.90, and he figures his fixed costs, on a daily basis, are about $3,100. From time to time, bus-tour groups with 50 patrons stop by. He has welcomed them because he has capacity to seat 600 diners in the average lunch period, and his cooking and wait staff can easily handle the additional load. The tour operator generally pays for the entire group on a single check to save the wait staff and cashier the additional time. Due to competitive conditions in the tour business, the operator is now asking Barry to lower the price to $5.40 per meal for each of the 50 bus-tour members.

Required -

1a. What is the incremental profit (loss) per bus-tour meal?

1b. Should Barry accept the bus-tour offer?

2a. What is the incremental profit (loss) for each meal if the tour company were willing to guarantee 200 patrons (or four bus loads) at least once a month for $5.00 per meal?

2b. Is the offer financially attractive?

Reference no: EM132843424

Questions Cloud

What is the z-score associated with number : A randomly-selected person between the ages 30 and 60 has a serum concentration of free T3 of 4.2 pmol/liter. What is the z-score associated with this number?
Function of leadership : You learned about the importance of shaping culture and how it is a critical function of leadership.
Estimate the difference between population proportions : To calculate a confidence interval to estimate the difference between population proportions, which of the following checks must be made?
Differentiate among various scales of measurements : Clearly differentiate among various scales of measurements. Give at least two examples of each scale?
What is the incremental profit per bus-tour meal : The operator is now asking Barry to lower the price to $5.40 per meal for each of the 50 bus-tour members. What is the incremental profit per bus-tour meal
Best interpretation of confidence interval : His confidence interval was (3.2 mg, 6.5 mg). Which one of the following is the best interpretation of this confidence interval?
The Grievance Process : Your firm has had a regular occurrence of formal grievances being filed, with some of them going to the very last step of arbitration
How many different ways can they appoint a president : A government consists of 12 people. In how many different ways can they appoint a President, Vice President, Treasurer, and Secretary?
Explain if think that global terrorism can be stopped : Assess if peace and stability in the Middle East are vital to U.S. economy and national security. Explain if think that global terrorism can be stopped.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Compute the total cost of the ipo as a percentage of the net

From Fish-Farm To Table is an consumer-conscious seafood. Compute the total cost of the IPO as a percentage of the net proceeds that the company raised.

  What is the break even quantity for a janesky company

What is the break even quantity for a price of $149? The Janesky Company has collected data on the manufacture of 8239 robot grippers last month.

  Will the value of the option increase or decrease

The domestic risk-free rate is 3% per annum, the foreign risk-free rate is 5% per annum, Will the value of the option increase or decrease

  Find which of the accounts are affected

You have entered a Purchase Order in QuickBooks for $1,000 to purchase inventory. Which of the following accounts are affected?

  Find and determine the weighted average number of shares

The company had begun their calendar fiscal year of 2018, Determine the weighted average number of shares to determine the basic earnings per share for 2018.

  Indicate accounts debited and credited

Indicate accounts debited and credited when recording each transaction by placing the proper account identification numbers to the right of each transaction.

  Prepare an almost complete comprehensive financial plan

Prepare an almost complete comprehensive financial plan for Betty and Robert Burger and  What are Robert's options if he wants to sell or be an absentee manager for his business at retirement time? Are there any special tax considerations that may ..

  What is the profit margin for the store

In response to complaints about high prices, a grocery chain runs, What is the profit margin for the store? (in %) (round 2 decimal places)

  Prepare journal entries for sarasota to record the sale

On March 10, 2017, Sarasota Company sold to Barr Hardware 170 tool sets at a price of $50 each (cost $32 per set) with terms of n/60, f.o.b. shipping point. Sarasota allows Barr to return any unused tool sets within 60 days of purchase. Prepare journ..

  Deteremine depreciation expence as the plug figure required

Precision Systems had sales of S820,000, cost of goods of $510,000, selling and administrative expense of $60,000, and operating profit of $103,000. What was the value of depreciation expense? Set this problem up as a partial income statement and det..

  What amount should be recognized as provision on december

Iriga Company issued the 2020 financial statements on March, What amount should be recognized as provision on December 31, 2020?

  Compute younts tax payable

Compute the net increase in Yount's deferred tax assets or deferred tax liabilities (identify which) for the year. Compute Yount's tax payable.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd