Question #1. Using the revenue and cost data table calculate the effect on profit of implementing Steffano's suggestion. Do you recommend staffing the Peabody Hotel location with two people? What alternative suggestions could improve the level of business? Discuss the benefits and disadvantages of each of your proposals.

Sgeeze Me Inc, operates 25 bars in at Coast hotels. The bars are typically staffed by ine person and, hustorically, have been quite profitable. In recent months, however, sales have fallen sharply because of increased competition. For example, at the start of the year, the location in the Peabody Hotel had an average of 30 transactions per hour. The decline apprars to be due to consumer reluctance to wait in line at Squeeze Me, since the opening, in late February, of two nearby competing bars. At a recent staff meeting, Julia Steffano, founder and CEO of Squeeze Me, made the following suggestion. "How about adding another staff oerson to the Peabody bar? Then our customers wont be waiting in line and we can reckver our loat business. Id be surprised if sales didn't get back to 30 transactions per hour, if we had two staffers working the bar." As the meeting ended, the company controller, Samuel Costello, vunteered to analyze the financial impact of increasing staffing at the Peabody Hotel location. Required: Using the revenue and cost data Table, calculate the effect on profit of implementing Steffano's suggestion. Do you recommend staffing the Peabody Hotel location with two people? What alternative suggestions could improve the level of business? Discuss the benefits and disadvantages of each of your proposals. Table 1 Revenue and cost data, Squeeze Me 10,800 10.044 8 700 324 148 g trans per hour 30 E A $49,200 $40,176 $40,320 534,800 528,800 522,272 $17,280 516,070 $16,128 513.920 611.520 4905 2.520 268 2520 2.520 2.436 475 ation 2,000 2000 7.000 2090 Rent 700 Other Total Cost 23,150 21,953 21,952 19.581 17 260 14.540 Ave cost per transaction 2.14 237 275