1) You run a school in Florida. Fixed monthly cost is $5,116.00 for rent and utilities, $5,701.00 is spent in salaries and $1,273.00 in insurance. Also every student adds up to $105.00 per month in stationary, food etc. You charge $718.00 per month from every student now. You are considering moving the school to another neighborhood where the rent and utilities will increase to $10,730.00, salaries to $6,707.00 and insurance to $2,272.00 per month. Variable cost per student will increase up to $150.00 per month. However you can charge $1,170.00 per student. At what point will you be indifferent between your current mode of operation and the new option?
2) A restaurant prepares 200.00 pizza slices and sells them at a rate of $10.00/slice. Expenses for the restaurant include raw material for pizza at $5.00 per slice, $111.00 as monthly rental and $34.00 monthly as insurance. Restaurant is open only for 25 days in a month. Today there was a party at nearby office so the demand for pizza went up to 215.00 slices. Due to lack of availability vendor could not fulfill the demand and analyzed a lost sale as $6.00 per item. How much profit could the restaurant earn today?
3) A vendor prepares 100.00 hotdogs every day and sells at $20.00 /piece. For each hot dog, he spends $11.00 in the raw material. Additionally he spends $1.19 for packing each hotdog and monthly $54.00, $21.00, $11.00 as food truck rent, electricity and other expenses respectively. On a particular day in June 113.00 people came wanting the hotdog. Vendor thinks $3.00 per lost sale. Determine vendor’s profit for that day? Assume there are 30 days in the month.