100 po 1 Three entrepreneurs were looking to start a new brewpub near Sacramento, California, called Roseville Brewing Company (RC) Brewpubs provide two products to customers-food from the restaurant segment and freshly brewed beer from the beer production segment. Both segments are typically in the same building, which allows customers to see the beer brewing process After months of research, the owners created a financial model that showed the following projections for the first year of operations Sales For sales Food sales Other sales Total sales Less cost of sales P Less marketing and administrative Mc 995,4 224,400 in the process of pursuing capital through private investors and financial institutions, RBC was approached with several questions. The t following represents a sample of the more common questions asked What is the break even point? What sales dollars will be required to make $290,000? To make $580,000? is the product mix reasonable? (Beer tends to have a higher contribution margin ratio than food and therefore product mix assumptions are critical to profit projections) What happens to operating profit if the product mix shifts? How will changes in price affect operating prof How much does a pint of beer cost to produce? Mast Help Save & Exit Submit Check my work 35 PM 1 It became clear to the owners of RBC that the initial financial model was not adequate for answering these types of questions. After further research, RBC created another financial model that provided the following information for the first year of operations 100 points Appe Sales Beer sales (40% of total sales) Food sales (49% of total sales) Other sales (11% of total sales) Total sales Variable Costs Beer (15% of beer sales) eBook Food (32% of food sales) Pint Other (30% of other sales) Mages of employees (21% of sales) References Supplies (2% of sales) Utilities (4% of sales) Other: credit card, misc. (1% of sales) $816,000 999,600 226,400 $2,040,000 $122,400 319,872 67,320 425,400 40,000 1,600 20,400 Total variable costs: Contribution margin Fixed Costs Salaries: manager, chef, brewer Maintenance Advertising Other cleaning, mis Insurance and accounting Property taxe Depreciation Debt service (interest on debt) Total fixed costs Operating profit $131,000 29,000 12,000 33,000 34,000 14,000 86,000 127,000 $1,000,792 $ 959,200 466,000 $ 493,208 Check my work Operating profit $ 493,208 100 points Skipped eBook Required: Perform a sensitivity analysis by answering the following questions: a. What is the break-even point in sales dollars for RBC? b. What is the margin of safety for RBC? c. What sales dollars would be required to achieve an operating profit of $290,000? $580,000? Complete this question by entering your answers in the tabs below. Pint Required A Required B Required C What is the break-even point in sales dollars for RBC? (Round intermediate calculations to 3 decimal places and your final answer to the nearest whole dollar.) References Brom even pont CRA Required B> 493,208 100 points Skipped eBook Required: Perform a sensitivity analysis by answering the following questions: a. What is the break-even point in sales dollars for RBC? b. What is the margin of safety for RBC? c. What sales dollars would be required to achieve an operating profit of $290,000? $580,000? Complete this question by entering your answers in the tabs below. Print Required A Required B Required C What is the margin of safety for RBC? (Round intermediate calculations to 3 decimal places and your final answer to the nearest whole dollar.) References Margin of safety 1 100 points Slopped Required: Perform a sensitivity analysis by answering the following questions: a. What is the break-even point in sales dollars for RBC? b. What is the margin of safety for RBC? c. What sales dollars would be required to achieve an operating profit of $290,000? $580,000? Complete this question by entering your answers in the tabs below. eBook Required A Required B Required C Print What sales dollars would be required to achieve an operating profit of $290,0007 $580,0007 (Round intermediate calculations to 3 decimal places and your final answers to the nearest whole dollar.) References Operating profit of $290,000 Operating profit of $580,000 Sales Dollars Help Save & Ext Check