Geno's restaurant has monthly fixed costs of $40,000 for rent, utilities, and upkeep. The average profit per dinner customer is $15.00. They are open six days a week and they assume an average of 26 business days per month. Assume for this analysis that only dinner is served.
a How many dinners per month must Geno's serve to break even?
b Geno presently spends nothing on marketing. If Geno spent $30,000 on advertising a year, what would the breakeven number of dinners per month be then?
c Geno would like to change the prices to make it so 2,500 customers would cover all fixed costs including $30,000 annually for marketing. How much would the average profit per customer need to change?