The owner of Willy's Wonderful Burger Stand is concerned because the stand has been averaging only 3,000 burger sales per month, the stand and staff can make 6,000 burgers per month. The variable cost of each burger ( buns, meat etc) is $2.50. Monthly fixed costs are ( taxes, licences, space rent and salaries) are $7,500. The owner (Willy Wonderful) believes he could sell 5,000 burgers per month if he cuts the sales price from $5.00 to $4.75 per burger. How much extra profit ( above the current level) would he generate if he decreased the sales price?
31) The owner of Fat Man's Sausage Cart is concerned because the stand has been averaging only 5,500 sausage sales per month, the stand and staff can make 7,000 sausage on a bun per month. The variable cost of each sausage ( buns, meat etc) is $3.50. Monthly fixed costs are ( taxes, licences, space rent and salaries) are $10,000. The owner (Big Bob) wants cost information about different volumes so that he can make some operating decisions.
Required: Fill in the following chart to provide Bob with the information he wants.
Monthly sausage sales3,0005,0007,000
Total fixed Costs$__________$__________$__________
Total variable cost$__________$__________$__________
Fixed cost per sausage$__________$__________$__________
Variable cost per sausage$__________$__________$__________
Average cost per sausage$__________$__________$__________
Sales price per sausage$7.50$7.50$7.50
Average price per sausage$__________$__________$__________
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