Lance’s Diner has a hot lunch special each weekday and Sunday afternoon. Food an
ID: 2469262 • Letter: L
Question
Lance’s Diner has a hot lunch special each weekday and Sunday afternoon. Food and other variable costs for the lunch are $4.10, and the daily fixed costs are $1,200. Lance has an average of 500 customers per day.
What is the lowest price 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 Lance charges on a normal weekly basis? (Round your answer to 2 decimal places.)
Lance’s Diner has a hot lunch special each weekday and Sunday afternoon. Food and other variable costs for the lunch are $4.10, and the daily fixed costs are $1,200. Lance has an average of 500 customers per day.
Explanation / Answer
Food and other variable costs for the lunch $4.10 Daily fixed cost $1,200.00 Average customers per day 500 a What is the lowest price Lance should charge for a special group of 200 that wants to come on Saturday for a family reunion? Food and other variable costs for the lunch $4.10 Daily fixed cost per lunch (1200/200) $6.00 Lowest price lance should charge for a special gropu of 200 $10.10 b What should be the lowest price Lance charges on a normal weekly basis? Food and other variable costs for the lunch $4.10 Daily fixed cost per lunch (1200/500) $2.40 Lowest price Lance charges on a normal weekly basis $6.50
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