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    Relationship of variable cost and incremental profit

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    Bubba's Steakhouse has budgeted the following costs for a month in which 1,600 steak dinners will be produced and sold: Materials, $4,080; hourly labor (variable), $5,200; rent (fixed), $1,650; depreciation, $790; and other fixed costs, $460. Each steak dinner sells for $13.30 each. How much would Shula's profit increase if 10 more dinners were sold?

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    Solution Preview

    Variable cost per steak dinner = (materials + hourly labor)/number of steak ...

    Solution Summary

    This solution provides calculations for profit increase if 10 more units of the product are sold.