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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