Expenses for a Pizza restaurant include raw material for pizza at $4.00 per slice, $116.00 as monthly rental and $45.00 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 $10.00/slice. There was a party at a nearby office so the demand for pizza went up to 212.00 slices. How much profit did the restaurant earn today

The restaurant earned a profit of $1145.56 which is approximately $1146

Explanation:

the formula is given as:

Q x (sale price – material cost) – ( rental + insurance)/day - loss

Q = 200

Sale price = $10

Material cost = $4

rental = $116

insurance = $45

lost sale expense = $4

day = 25

increased demand = 212

= 200(10 - 4) - (116 + 45)/25 - (212 - 200)4

= 200(6) - 6.44 - 48

= 1200 - 6.44 - 48

= $1145.56

This is approximately $1146

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