We are considering hiring a catering company. Currently, we are preparing meals for employees. The following is the cost of preparing a meal: Food $3.00 Labor 2.00 Fixed overhead 1.00 Total $6.00 The caterer has quoted a price of $5.50 per meal. Please help us to determine whether we should buy meals from this catering company.

Company A can order meals for its employees from a catering company or prepare meals on-site. Use the information in the exhibit to complete the following items.

Question	Answer
1. Which option is less expensive?	Buy
2. What other factors could affect decision-making?	All of the above factors
3. Assume in addition that the rent of a kitchen for preparing meals is $200 per day, one meal is served to each employee per day, and the company has 100 employees. What is the maximum price the company should pay for a catered meal?

 

Answer rating: 100% (QA)

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