In evaluating capacity planning alternatives from an economic standpoint, Cost-volume analysis is used. Old Fashioned Chairs has the following costs; Total Cost, TC = $1,500, Fixed Cost, FC = $900 and Variable Cost, VC = $600. Revenue per unit, R = $500 and variable cost per unit, v = $200. What is the Contribution Margin that goes toward absorbing costs of manufacturing?

A Restaurant is experiencing long customer wait times and needs to increase capacity by 25% to satisfy the increased demand. Plenty of space and tables are available. Each waiter can handle 10 customers per hour. Currently, there are 8 waiters who can handle 80 customers per hour. How many more waiters are needed?