The owner of Genuine Subs, Inc., hopes to expand the present operation by adding one new outlet. She has studied three locations. Each would have the same labor and materials costs (food, serving containers, napkins, etc.) of $1.76 per sandwich. Sandwiches sell for $2.65 each in all locations. Rent and equipment costs would be $5,000 per month for location A, $5,500 per month for location B, and $5,800 per month for location C.
Answer the following questions.
a. Determine the monthly volume necessary at each location to realize a monthly profit of $10,000. Hint: you may do this problem manually for each location or recognize that the break even analysis template from a previous lesson will provide the answers very quickly.
b. If the monthly expected sales volume at A, B, and C is 21,000, 22,000, and 23,000, respectively, determine the profits at each location.