Extensions of the CVP ModelSemifixed (Step) Costs Sam's Sushi serves only a fixed-price lunch. The...
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Extensions of the CVP ModelSemifixed (Step) Costs
Sam's Sushi serves only a fixed-price lunch. The price of $10 and the variable cost of $4 per meal remain constant regardless of volume. Sam can increase lunch volume by opening and staffing additional check-out lanes. Sam has three choices:
Required: Monthly Volume Range (Number of Meals) Total fixed cost
1 lane ........ 0-5,000 $33,000
2 lanes.............. 5,001-8000 39,000
3 lines .......... 8,001-10,000 52,500
a. Calculate the break-even point(s).
b. If Sam can sell all the meals he can serve, should he operate at one, two, or three lanes?
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