Given the following, how did the CVP change? Assuming cars are always waiting to order 24 hours per day and the kitchen capacity is unlimited, how many cars per hour can be accommodated in the before and after configuration? How long would customers wait for an order in each configuration? What would the hourly sales be in each configuration? What percent of increase in contribution margin and net operating income would occur with the new configuration? The cost of reconfiguration is $40,000 with an asset life of 7 years. The annual fixed costs are $801,000, and increase 6% in the new configuration. What is the break even point after the reconfiguration? What will the payback period be? What additional information would you like to have to evaluate this scenario?
- Average sale per car: $5.55
- Average contribution margin per car: $3.22
- Average time to take an order: 1 minute per car
- Average time to prepare an order: 2 minutes per car
• Average time to collect money from the customer for an order: .5 minutes
- Average time to hand out an order: 15 seconds
Key items to include: a CVP graph and a before and after Contribution Margin format statement.