Question
A restaurant has a cafe and bar operation. The cafe provides 65% of total sales revenue with a 48% variable cost. The bar provides 35%
A restaurant has a cafe and bar operation. The cafe provides 65% of total sales revenue with a 48% variable cost. The bar provides 35% of total sales revenue with a 38% variable cost. Answer the following:
a. What is the contribution margin of the cafe?
b. What is the contribution margin of the bar?
c. What is the combined contribution margin of the cafe and bar?
d. Assume the owner wants operating income to increase by $50,000, with the increase being provided jointly by the cafe and bar. What is the additional sales revenue required?
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Financial Accounting Tools for business decision making
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
6th Edition
978-1119191674, 047053477X, 111919167X, 978-0470534779
