Refer to Scenario 9

question 13

Multiple Choice

Refer to Scenario 9.10 below to answer the question(s) that follow.
SCENARIO 9.10: Investors put up $1,040,000 to construct a building and purchase all equipment for a new cafe. The investors expect to earn a minimum return of 10 percent on their investment. The cafe 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 $2,000 in other fixed costs. Variable costs include $2,000 in weekly wages, and $600 per week in materials, electricity, etc. The cafe charges $6 on average per meal.
-Refer to Scenario 9.10. In the short run, if the cafe shuts down, its losses will equal its ________ costs of ________.

Definitions:

Nonworking Spouse

A spouse who does not participate in the formal workforce, often focusing on domestic duties or childcare instead.

Flextime

Scheduling arrangement that permits employees to change their daily arrival and departure times.

Extended Leave

A prolonged period of absence from work or duties, often related to personal, family, or medical reasons, that exceeds typical leave allowances.

Outearn

To earn more money than someone else, often used in the context of comparing incomes between spouses, co-workers, or other groups.