A Hospital currently prepares its own food. Information regarding the food service is as follows: Meals per
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Question:
A Hospital currently prepares its own food. Information regarding the food service is as follows:
Meals per week: 5,800
Variable cost per meal: $4.60
Fixed cost: $9,200 per week
An outside kitchen resource proposes the following:
Rent a new oven for $13,000 per week
Savings with new oven: $2.90 per meal
New fixed costs for food preparation: $6,000 per week (previously $9,200 per week)
What is the break even point with the new oven?
Besides costs, what other factors should be considered when purchasing a new oven?
Do you recommend the purchase of the oven? Why or Why not?
Related Book For
Financial Management for Public Health and Not for Profit Organizations
ISBN: 978-0132805667
4th edition
Authors: Steven A. Finkler, Thad Calabrese
Posted Date: