Problem 8-2 The owner of Genuine Subs, Inc, hopes to expand the present operatio

Question

Problem 8-2 The owner of Genuine Subs, Inc, hopes to expand the present operation by adding one new outlet. She has studied three locations. Each would have the same labor and materials costs (food, serving containers, napkins, etc.) of $1.70 per sandwich. Sandwiches sell for $2.55 each in all locations. Rent and equipment costs would be $5,050 per month for location A, $5,560 per month for location B, and $5,790 per month for location c. a. Determine the volume necessary at each location to realize a monthly profit of $10,500 (Do not round intermediate calculations. Round your answer to the nearest whole number.) ocationMonthly Volume 17204 17785 17989 respectively calculate the profit of the each locations? (Omit the "St sign in your response.) LocationMonthly Profits 2355 2487 2510 Search the web and Windows

Explanation / Answer

a.

Let x be the monthly volume for the location A to get required mothly profit.

From the given condition, our required equation for location A is

2.55x-1.70x-5050=10500

or, x= 18294

So, required monthly volume for location is 18294

Similarly, we can find required montly volume for location B and C are 18894 and 19165 respectively.

b.

Expected sell at location A is 20800 per month. So, profit for location A will be

(2.55-1.70) x 20800-5050= 12,125

Similarly profit for location B and C are 13735 and 14015 respectively.

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