Refer to Scenario 9

question 349

Multiple Choice

Refer to Scenario 9.3 below to answer the question(s) that follow.
SCENARIO 9.3: Investors put up $520,000 to construct a building and purchase all equipment for a new restaurant. The investors expect to earn a minimum return of 10 per cent on their investment. The restaurant is open 52 weeks per year and serves 900 meals per week. The fixed costs are spread over the 52 weeks (i.e. prorated weekly) . Included in the fixed costs is the 10% return to the investors and $1,000 per week in other fixed costs. Variable costs include $1,000 in weekly wages and $600 per week for materials, electricity, etc. The restaurant charges $5 on average per meal.
-Refer to Scenario 9.3. Total variable costs per week are

• A) $600.
• B) $1,000.
• C) $1,600.
• D) $2,000.

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Definitions:

Margin of Error

An indicator of the precision of an estimate in statistics, showing the range within which the true value is expected to lie with a certain level of confidence.

Confidence Interval

A range of values that is used to estimate the true value of a population parameter with a certain level of confidence.

Standard Deviation

An index used to assess the extent of variation or scatter among data points.

Sample Size

The number of observations or individuals in a subset collected from a population for the purposes of statistical analysis.