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Calculating the operating income from the function

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A catering service has been asked to provide a lunch buffet the next day for 40 people at a set price of $10.50 per person; no function has been booked for the next two days. The catering service has fixed costs of $150.00 a day or $54,750 per operating year, and it operates with a variable cost of 65% of sales revenue. Calculate the operating income from the function and justify your decision to accept or reject the booking.

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Solution Summary

The solution gives detailed steps on calculating the operating income from the function.