A "Little Sis" Restaurant Has Been Opened as a Prototype

question 23

Multiple Choice

A "Little Sis" restaurant has been opened as a prototype to test the concept of a smaller facility with a limited menu. Experience during the first two years was as follows:
The average sale is $10 per customer. Use the following partially completed graph to determine the break-even quantity graphically. Then refine your solution by solving it algebraically.

• A) The break-even quantity is fewer than or equal to 30,000 customer visits.
• B) The break-even quantity is more than 30,000 customer visits and fewer than or equal to 50,000 visits.
• C) The break-even quantity is more than 50,000 visits and fewer than or equal to 70,000 visits.
• D) The break-even quantity is more than 70,000 customer visits.

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Definitions:

T-account

A graphical representation used in accounting to illustrate the effects of transactions on account balances, with debits on the left and credits on the right.

Credit

A financial term denoting the ability to obtain goods or services before payment, based on the trust that payment will be made in the future.

Asset Accounts

Accounts that represent the different types of economic resources owned or controlled by a business, such as cash, inventory, and equipment.

General Ledger

A complete record of all financial transactions over the life of a company, serving as the primary source of information for the financial statements.