I have the follwing problem :
In January a restaurant incurs the following costs: 8000 for fresh food, 150 cooking oil, 3000 staff (10% administrative), 1000 for gas (40% central heating), 100 internet contract. In January, the restaurant serves 1000 covers. In February, variable costs increase by 20% and the restaurant serves 250 more covers.
1. Find average variable cost, average fixed cost and average total cost in January.
2. Find average variable cost, average fixed cost and average total cost in February.
We got the following solution for no 1 :
Variable costs: fresh food, cooking oil, 90% of staff, 60% of gas=8000+150+2700+600=11450
Fixed costs: 10% staff, 40% of gas, internet=300+400+100=800
AVC=11450/1000=11.45
AFC=800/1000=0.8
ATC=11.45+0.8=12.25
All good and nice until here. For no 2 we got this :
VC=11450*1.2=13740
AVC=13740/1250=10.99
AFC=800/1250=0.64
ATC=10.99+0.64=11.63
Would anyone please be kind enough to tell me or show me from where do we have *1.2 here VC=11450*1.2=13740 and then why at AVC we divide 13740 with 1250? How did we got 1250?
I am more than grateful for any help!
In January a restaurant incurs the following costs: 8000 for fresh food, 150 cooking oil, 3000 staff (10% administrative), 1000 for gas (40% central heating), 100 internet contract. In January, the restaurant serves 1000 covers. In February, variable costs increase by 20% and the restaurant serves 250 more covers.
1. Find average variable cost, average fixed cost and average total cost in January.
2. Find average variable cost, average fixed cost and average total cost in February.
We got the following solution for no 1 :
Variable costs: fresh food, cooking oil, 90% of staff, 60% of gas=8000+150+2700+600=11450
Fixed costs: 10% staff, 40% of gas, internet=300+400+100=800
AVC=11450/1000=11.45
AFC=800/1000=0.8
ATC=11.45+0.8=12.25
All good and nice until here. For no 2 we got this :
VC=11450*1.2=13740
AVC=13740/1250=10.99
AFC=800/1250=0.64
ATC=10.99+0.64=11.63
Would anyone please be kind enough to tell me or show me from where do we have *1.2 here VC=11450*1.2=13740 and then why at AVC we divide 13740 with 1250? How did we got 1250?
I am more than grateful for any help!