Owner Shan Lo is considering franchising her Noodles by Lo restaurant concept. She believes people will pay

Question:

Owner Shan Lo is considering franchising her Noodles by Lo restaurant concept. She believes people will pay $6.50 for a large bowl of noodles. Variable costs are $3.25 per bowl. Lo estimates monthly fixed costs for a franchise at $3,000.
Requirements
1. Use the ratio approach to find a franchise’s breakeven sales in dollars.
2. Lo believes most locations could generate $34,500 in monthly sales. Is franchising a good idea for Lo if franchisees want a minimum monthly operating income of $13,500? Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...