Question
Expresso (Pty) Ltd sells hot and iced coffee beverages, and small snacks. The following is the previous months statement of profit or loss. Revenue $7,500
Expresso (Pty) Ltd sells hot and iced coffee beverages, and small snacks. The following is the previous months statement of profit or loss.
| Revenue |
| $7,500 |
| Cost of beverages and snacks | $2,500 |
|
| Cost of napkins, straws etc. | 700 |
|
| Cost to rent cart | 800 |
|
| Employee wages | 2,000 | 6,000 |
| Pre-tax profit |
| 1,500 |
| Tax |
| 525 |
| After-tax profit |
| $ 975 |
Required
- What is the total fixed cost for the month under review?
- What is Expressos tax rate for the month under review?
- Calculate the amount of sales needed to reach a targeted after-tax profit of $1,500?
- What was Expressos degree of operating leverage for the month under review?
- What was Expressos margin of safety in revenue for the month under review?
- What was Expressos margin of safety percentage?
- Suppose this months actual revenues are $8,000 and pre-tax profit is $2,000. What will the total cost be?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
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 Started
Auditing Diversity In Library Collections
Authors: Rosalind Washington, Sarah Voels
1st Edition
1440878749, 978-1440878749
