Expenses for a Pizza restaurant include raw material for pizza at $5.00 per slice, $122.00 as monthly rental and $49.00 monthly as insurance. Lost sale expense is considered to be $4.00 per unhappy customer. Leftover Pizza can be sold for $3. The restaurant is open 25 days in a month.

Question

Today the restaurant prepared 200.00 pizza slices and sells them for $12.00/slice. There was a party at a nearby office so the demand for pizza went up to 213.00 slices. What is the daily fixed costs expense?

Answer 1

To calculate the daily fixed costs expense for the pizza restaurant, we need to consider the monthly expenses and divide them by the number of days the restaurant operates in a month.

The fixed costs include the monthly rental and monthly insurance.

1. Monthly Rental: $122.00
2. Monthly Insurance: $49.00

Now, we can calculate the total monthly fixed costs:

\[ \text{Total Monthly Fixed Costs} = \text{Monthly Rental} + \text{Monthly Insurance} \] \[ \text{Total Monthly Fixed Costs} = 122 + 49 = 171 \]

Next, we need to determine the daily fixed costs by dividing the total monthly fixed costs by the number of operating days in a month.

The restaurant operates for 25 days in a month.

\[ \text{Daily Fixed Costs} = \frac{\text{Total Monthly Fixed Costs}}{\text{Number of Days Open in a Month}} \] \[ \text{Daily Fixed Costs} = \frac{171}{25} = 6.84 \]

Therefore, the daily fixed costs expense is $6.84.