The owner of Genuine Subs, Inc., hopes to expand the present operation by adding

Question

The owner of Genuine Subs, Inc., hopes to expand the present operation by adding one new outlet. She has studied three locations. Each would have the same labor and materials costs (food, serving containers, napkins, etc.) of $1.60 cents per sandwich. Sandwiches sell for $2.69 each in all locations. Rent and equipment costs would be $5,030 per month for location A, $5,510 per month for location B, and $5,770 per month for location C.

If expected sales at A, B, and C are 20,500 per month, 22,800 per month, and 23,400 per month, respectively, calculate the profit of the each locations?

The owner of Genuine Subs, Inc., hopes to expand the present operation by adding one new outlet. She has studied three locations. Each would have the same labor and materials costs (food, serving containers, napkins, etc.) of $1.60 cents per sandwich. Sandwiches sell for $2.69 each in all locations. Rent and equipment costs would be $5,030 per month for location A, $5,510 per month for location B, and $5,770 per month for location C.

Explanation / Answer

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Please find the answer as follows:

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Location A Location B Location C Sales 55145 61332 62946 Less Variable Cost 32800 36480 37440 Less Fixed Cost 5030 5510 5770 Net Profit 17315 19342 19736

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