1. Darien Industries operates a cafeteria forits employees. The operation of the

1. Darien Industries operates a cafeteria forits employees. The operation of the cafeteria requires fixed costsof $4700 per month and variable costs of 40% of sales. Cafeteriasales are currently averaging $12000 per month. Darien has anopportunity to replace the cafeteria with vending machines. Grosscustomer spending at the vending machines is estimated to be 40%greater than current sales because the machines are available atall hours. By replacing the cafeteria with vending machines Darienwould receive 16% of the gross customer spending and avoid allcafeteria costs.