Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Juan Monserrate Ordoez is the owner and manager of the SEA SHORE Restaurant in Cabo Rojo. Monthly fixed costs are $17,000. It serves lunch

 

Juan Monserrate Ordoez is the owner and manager of the SEA SHORE Restaurant in Cabo Rojo. Monthly fixed costs are $17,000. It serves lunch and dinner. The dishes at the Dinner are much more exclusive. The average bill is $72.00 per person. This price does not include taxes or gratuities. It is estimated that the variable cost per average dish is $38.00 per dish. Required 1. 2. 3. 4. Determine the number of dishes you would have to sell to earn an operating income of $25,000 per month. Determine the number of dishes you would have to sell to earn a net income - Net Income of $25,000 per month, if the tax were 30%. Determine the tie point in units and dollars. Presume that at SEA SHORE Restaurant, rent and other fixed costs increased to $50,840 and variable cost also increased to $42.80 per dish. The average price per dish as a result of cost increases is now $80. How many dishes are now needed, to reach an operating income of $25,000 per month? 5. Juan Monserrate Ordoez's accountant warns you that with price and cost changes made in #4 above, you can lose 15% of customers. If this projection of losing customers is met, how would the Restaurant's operating income calculated in required 4 be affected?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Lets address each of the required calculations 1 To determine the number of dishes to earn an operat... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Organizational Behaviour Concepts Controversies Applications

Authors: Nancy Langton, Stephen P. Robbins, Timothy A. Judge, Katherine Breward

6th Canadian Edition

132310317, 978-0132310314

More Books

Students also viewed these Accounting questions