G15 fx B A D E F G H 1 Chapter 9, Question 6 2 Hint: See the textbook starting on Page 356 for help with this problem. Follow along with the formulas in the boxes as you 3 4 Check average (selling price) $16.50 S Variable cost per unit (guest) S5.60 6 Annual fixed costs $180,000 7 8 a Per Unit (Guest) Percentage 9 SP 100% 10 VC CM (contribution margin) 12 13 Fixed costs 14 Desired after-tax profit $24,000.00 15 Tax rate 40% 16 Before-tex profit 17 (Spreadsheet hint: Use the ROUNDUP function for "Rounded up - Breakeven point in guest served" and "Rounded up - Guests served to achieve desired 18 b. after-tax profit.") 19 Breakeven point in sales dollars 20 21 Breakeven point in guests served Rounded up 0 22 Sales dollars to achieve desired after 23 tax profit 24 Guests served to achieve desired 25 after-tax profit 0 26 Lynn's Modifications 28 Reduction in average selling price $2.00 29 Decrease in variable costs 5% 30 Reduction in annual fixed costs $10,000 31 (Spreadsheet hint: Use the ROUNDUP function for "Rounded up - Guests 32 served to achieve desired aftertax profit.") 33 Per Unit (Guest) Percentage Q1 Q2 Q3 Q4 Q5 Ready Rounded up 27 C Title Page A B D E F G H 17 (Spreadsheet hint: Use the ROUNDUP function for "Rounded up Breakeven point in guest served" and "Rounded up - Guests served to achieve desired after-tax profit.") Breakeven point in sales dollars 18 b. 19 20 21 22 Breakeven point in guests served Rounded up = 0 Sales dollars to achieve desired after tax profit 23 24 Guests served to achieve desired after-tax profit 25 26 Rounded up 0 27 c. 28 29 30 31 Lynn's Modifications Reduction in average selling price Decrease in variable costs Reduction in annual fixed costs $2.00 5% $10,000 32 33 34 35 36 37 38 39 (Spreadsheet hint: Use the ROUNDUP function for "Rounded up - Guests served to achieve desired aftertax profit.") Per Unit (Guest) Percentage SP VC CM Fixed costs Sales dollars to achieve desired after tax profit 40 41 Guests served to achieve desired after-tax profit Rounded up 0 42 43 44 45 46 47 Title Page
