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Calculating costs for University Cafe

The University Café has seen sales drop since classes have been scheduled during the noon hour and only 5 minutes between classes. Students don't have enough time to choose from the buffet line. The cafeteria manager has considered offering boxed lunches that would come with a sandwich, chips, a cookie and soft drink. Students could quickly choose these for a set price.

To set up this new system, the cafeteria manager would have to buy some new equipment costing $1000, a one-time, fixed cost. He has estimated his variable cost per box to be $1. He would like to sell the boxed lunches for $5.
The cafeteria is open 4 days per week in a 10 week quarter. If 25 lunches are sold per day, how much profit would the cafeteria realize at the end of the quarter?

A. $1000
B. $5000
C. $3000
D. impossible to tell with the given information

Solution Preview

C. 3000

This is derived by determining the profit from sales minus ...

Solution Summary

ONE multiple choice answer with explaination