Refer to Scenario 9

question 319

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. The restaurant is making ________ economic profits per week.

• A) positive
• B) zero
• C) negative
• D) break-even

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Definitions:

Hybrid Structure

An organizational framework that combines elements of both functional and divisional structures, allowing for flexibility and more focused specialization.

Matrix Structure

A hybrid organizational structure that merges at least two different structural types, often integrating functional and product-oriented frameworks.

Divisional Structure

constitutes an organizational framework where divisions are established based on products, services, market geography, or customer types and operate semi-autonomously with their own resources.

Matrix Structure

is an organizational layout that assigns employees to projects and functional areas simultaneously, allowing for more dynamic and flexible team composition.