Question
Alert: The cost of ground beef just increased by $1.20 per pound. Prepare an incremental analysis to show management how much that will impact their
Alert: The cost of ground beef just increased by $1.20 per pound. Prepare an incremental analysis to show management how much that will impact their break-even point in units and their profitability. 2) An analysis from marketing reveals that by spending $500 per month on advertising, that sales will increase by 10%. Prepare an incremental analysis to show management how much that will impact their break-even point in units and their profitability. Ignore #1 above for this analysis (I.e. use your original data before the ground beef increase. Advise Mrs. Burger on if you believe this is a wise move and explain why or why not. 3) By popular demand, management has now decided to offer French fries and medium soft drinks to the menu. They have decided to match In-N-Out prices for these items (Hint: google In-N-Out 2023 Top Restaurant Prices or just use this as an excuse to go to In-N-Out for research purposes. - For purposes of this analysis, assume that 75% of the customers will want an order of French fries and a soft drink with their cheeseburger order. - Assume that the variable cost of the French fries will be 50% of the sales price and the variable cost of the soft drinks will be 30% of the sales price. Assume that new equipment will need to be leased at a cost of $12,000 per year.
Prepare an incremental analysis to show management how much adding these items to the menu will impact their break-even point in units and their profitability. Again, ignore #1 and #2 for this incremental analysis. - Advise management if you recommend adding these two new items to the menu and why or why not. Explain your rationale. Pulling it all together: Finally, prepare an overall analysis demonstrating to management the impact on the break-even point and profitability of incorporating all of the above outlined in #s 1, 2, and 3.
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