#2

Expenses for a Pizza restaurant include raw material for pizza at $4.00 per slice, $115.00 as monthly rental and $23.00 monthly as insurance. Lost sale expense is considered to be $4.00 per unhappy customer. Leftover Pizza can be sold for $3. The restaurant is open 25 days in a month.

Today the restaurant prepared 200.00 pizza slices and sells them for $12.00/slice. There was a party at a nearby office so the demand for pizza went up to 225.00 slices. How much profit did the restaurant earn today?

#5

You run a school in Florida. Fixed monthly cost is $5,047.00 for rent and utilities, $6,443.00 is spent in salaries and $1,442.00 in insurance. Also every student adds up to $95.00 per month in stationary, food etc. You charge $675.00 per month from every student now.

You are considering moving the school to another neighborhood where the rent and utilities will increase to $10,311.00, salaries to $6,375.00 and insurance to $2,349.00 per month. Variable cost per student will increase up to $161.00 per month. However you can charge $1,013.00 per student. At what point will you be indifferent between your current mode of operation and the new option?

#7

A restaurant prepares 200.00 pizza slices and sells them at a rate of $11.00/slice. Expenses for the restaurant include raw material for pizza at $5.00 per slice, $109.00 for monthly rental and monthly insurance of $25.00. Lost sale are taken as $6.00 per unhappy customer. Leftover pizza can be sold for $2.00. The restaurant is open only for 25 days in a month. Today there was a party at nearby office so the demand for pizza went up to 213.00 slices. How much profit could the restaurant earn today?