QUESTION 5 [20 MARKS] (a) Explain what is meant by the term 'cost volume profit (CVP) analysis'. (2 marks) (b) The Eat Well Restaurant operates on a 24-hour basis. Its business operation is during breakfast, lunch, and dinner. The owner of Eat Well has estimated that its monthly fixed costs would be $24,000 and variable costs are estimated to be $9.60 per meal. A customer will on average spend $12 per meal. Eat Well expect that 12000 customers will visit the restaurant each month. 0 Calculate the monthly break-even point (per meal) (2 Marks) (i) Calculate the break-even sales value in dollars) (2 Marks) (iii) Calculate the profit or loss at the activity level of 12000 meals. (2 Marks) (iv) Calculate the margin of safety (2 Marks) (v) Calculate the number of meals that the restaurant need to serve in order to achieve a profit of $6,000 per month. (2 Marks) (vi) Assume that the monthly fixed costs increase to $30,000. How many additional meals must be served if the restaurant wishes to earn the same profit as in (v) above? (4 Marks) (vii) Management of Eat Well is considering investing on advertising and this will result in an increase in monthly fixed costs by 5% and the selling price is reduced by 10% to boost up sales. It is expected that unit variable cost will be $9.00. Calculate the new break-even point in sales volume. (4 Marks)