Question
Exercise 3.2 I. Assume that variable costs are not controlled and that budgeted costs of sales for food and beverage increase to $600,000 and total
Exercise 3.2 I. Assume that variable costs are not controlled and that budgeted costs of sales for food and beverage increase to $600,000 and total sales are as budgeted ($1,665.472.20). Calculate profit for Barnaby's Hideaway. All other costs remain the same. 2. Calculate the new variable rate and new contribution rate, assuming the same variable salaries and employee benefits. 3. Calculate the break-even point for Barnaby's Hideaway using the new contribution rate. 4. Using the new contribution rate, calculate the sales level necessary for Barnaby's Hideaway to earn the budgeted profit of $166,794.43. 5. Assum e that the new contribution margin falls to $12.60. Calculate the number of customers necessary to break even.
FIGURE 3.2 The Grandview Bistro, Necessary Sales Level to Earn an Acceptable Profit When Prime Costs Increase as a Percentage of Sales Sales Cost of sales Cost of labor Cost of overhead Profit $1,500,000.00 $ 600,000.00 $450,000.00 $311,896.00 $138,150.00 100.00% 40.00% 30.00% 20.79% 9.21%Step by Step Solution
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