George Street Deli's owner is disturbed by the poor profit performance of his gelato bar. He has
Question:
George Street Deli's owner is disturbed by the poor profit performance of his gelato bar. He has prepared the following profit analysis:
Required:
1. Evaluate the above analysis that has been prepared by the manager.
2. Provide a correct analysis and assess whether or not the gelato bar should be continued.
Transcribed Image Text:
$67 500 Sales 30 000 Less Cost of food $37 500 Gross margin Less Operating expenses: $18 000 Wages of counter staff 6 000 Paper products (e.g. serviettes) 4 350 Utilities (allocated) 3 750 Depreciation of counter equipment and furnishings 6 000 Depreciation of building (allocated) 4 500 Deli manager's salary (allocated) 42 600 Total expenses $(5 100) Loss on gelato bar
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1 The owners analysis incorrectly includes the following allocated costs that will b...View the full answer
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Related Book For
Management Accounting
ISBN: 9781760421144
7th Edition
Authors: Kim Langfield Smith, Helen Thorne, David Alan Smith, Ronald W. Hilton
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