Challenging questions for business students


Consider a luncheonette whose main entree is spaghetti. Monthly sale volume is approximately 2000 servings. In this luncheonette, both the personnel and the equipment are idle much of the time since the luncheonette was opened a few weeks ago, and not yet built customer demand to meet its supply capacity.  Assume that the cost and profit per plate for the spaghetti is calcualted as shown in the table belwo:

Cost and Profit per plate

Selling price                                                   $1.10

Raw materials and other variable cost        0.4

Wet Towel                                                        0.1

Labor Cost (fixed cost)                                   0.25

Overhead Cost   (fixed cost)                          0.15

Profit                                                                 0.20


One day, a waiter accidentally, dropped a plate of spaghetti in the process of serving. The plate didnt break but one extra serving had to be prepared. How much loss may be attributed to the accident??

What is ur answer?


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