Question
E19.27 Drop product line: retailer George Street Deli's owner is disturbed by the poor profit performance of his gelato bar. He has prepared the
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E19.27 Drop product line: retailer George Street Deli's owner is disturbed by the poor profit performance of his gelato bar. He has prepared the following profit analysis: $67 500 Sales Less Cost of food 30 ooo $37 500 Gross margin Less Operating expenses: $18 ooo Wages of counter staff Paper products (e.g. serviettes) 6 ooo Utilities (allocated) 4 350 Depreciation of counter equipment and furnishings 3 750 Depreciation of building (allocated) 6 ooo Deli manager's salary (allocated) 4 500 Total expenses 42 600 Loss on gelato bar 100) Required: 1. Evaluate the above analysis that has been prepared by the manager. 2. Provide a correct analysis and assess whether or not the gelato bar should be continued.
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