BGN5eCh08Exam

# Rickys fiesta diner is a family owned restaurant that

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2. Ricky’s Fiesta Diner is a family-owned restaurant that serves pizza and Italian dishes. Data concerning the restaurant’s monthly revenues and costs appear below (q refers to the number of meals served): Formula Revenue \$12q Cost of ingredients \$3.50q Wages \$7,500 Utilities \$600 + \$0.20q Rent \$2,500 Assuming that 1,500 meals are served, the net operating income that would be included in the diner’s planning budget for January would be: A) \$1,500. B) \$1,850. C) \$16,150. D) \$18,000. Feedback – The correct answer is B: Learning Objective 1 – Determine the net operating income that would be included in the planning budget as follows: Budgeted meals served (q) 1,50 0

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Revenue (\$12q) \$18,00 0 Expenses: Cost of ingredients (\$3.50q) 5,250 Wages (\$7,500) 7,500 Utilities (\$600 + \$0.20q) 900 Rent (\$2,500) 2,500 Total expense 16,150 Net operating income \$ 1,850 3. Ricky’s Fiesta Diner is a family-owned restaurant that serves pizza and Italian dishes. Data concerning the restaurant’s monthly revenues and costs appear below (q refers to the number of meals served): Formula Revenue \$12q Cost of ingredients \$3.50q Wages \$7,500 Utilities \$600 + \$0.20q Rent \$2,500 Assume that 1,600 meals were served in January. The total expense that would be budgeted at this level of activity would be:
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