Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. What is the level of sales required to achieve a 15% ROI on an investment of $10,000,000 for the following two departments (food and

1. What is the level of sales required to achieve a 15% ROI on an investment of $10,000,000 for the following two departments (food and beverage) restaurant while covering all costs?

Consider the following:

1. Food generates 90% of sales with a contribution margin ratio of 0.70

2. Beverages generate the remainder of sales with a CMR of 0.50

3. The restaurant's tax rate is 30%

4. Annual fixed costs amount to $1,000,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting With Ready Notes

Authors: Ronald W. Hilton

1st Edition

0075619733, 978-0075619734

More Books

Students also viewed these Accounting questions

Question

c. What groups were least represented? Why do you think this is so?

Answered: 1 week ago