Refer to Scenario 9

question 128

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 revenue per week is

• A) $3,000.
• B) $4,000.
• C) $4,500.
• D) $8,100.

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Definitions:

Supply Chain Profits

The total earnings generated across all stages of the product's journey from raw material to the end customer.

Wasted Capacity

The portion of production or storage capacity that goes unused or underutilized, often resulting in increased costs and inefficiencies.

Pricing

The process of determining the cost at which a product or service will be sold to consumers.

Influence Demand

The ability to affect consumer desire or need for products and services through marketing efforts, quality improvements, or price adjustments.