Question
A restaurant has three main products. Fixed costs are $397,000 and the tax rate is 35%. Other financial information is as follows: Item drinks
A restaurant has three main products. Fixed costs are $397,000 and the tax rate is 35%. Other financial information is as follows: Item drinks meals desserts Average Selling price per item (in $) Margin per item 10 60% 25 10 Average Contribution 20% 50% Total Sales Dollars (in % of total sales) 40% 50 % 10% What are total sales (in dollars) needed to make an after tax profit of $200,000, assuming that the sales mix remains constant? How many drinks would they need to serve per week to make an after-tax profit of $200,000? (assume 52 weeks in a year)
Step by Step Solution
3.37 Rating (144 Votes )
There are 3 Steps involved in it
Step: 1
The total contribution margin Drinks Contribution Margin 60 of 10 6 Meals Contribution Margin 2...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get StartedRecommended Textbook for
Accounting Tools for business decision making
Authors: kimmel, weygandt, kieso
4th Edition
978-0470117262, 9780470534786, 470117265, 470534788, 978-0470095461
Students also viewed these Accounting questions
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
View Answer in SolutionInn App