Question

Expenses for a Pizza restaurant include raw material for pizza at $6.00 per slice, $120.00 as monthly rentai and $20.00 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. 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 225.00 slices. What is the dally fixed costs expense?

Answer 1

The daily fixed costs expense for the Pizza restaurant is $5.60, calculated by dividing the sum of the monthly rent and insurance costs by the number of days the restaurant is open in a month.

Step-by-step explanation:

The daily fixed costs expense for the Pizza restaurant includes the monthly rent and insurance expenses, which are independent of the number of pizza slices produced or sold. These costs occur regularly and do not vary with daily operations. To calculate the daily fixed expense, we divide the sum of the monthly fixed expenses by the number of days the restaurant is open in a month.

The monthly rental cost is $120.00, and the monthly insurance cost is $20.00. Since the restaurant is open for 25 days in the month:

• Total monthly fixed costs: $120.00 (rent) + $20.00 (insurance) = $140.00
• Daily fixed costs: $140.00 / 25 days = $5.60 per day

Therefore, the daily fixed costs expense for the Pizza restaurant is $5.60.