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McDonald's manager is not satisfied by the poor profit performance of his McCafe counter. He asked his new accounting intern to prepare a profit analysis
McDonald's manager is not satisfied by the poor profit performance of his McCafe counter. He asked his new accounting intern to prepare a profit analysis for the year: Sales 55 000 KWD COGS 30 000 KWD Gross Profit 25 000 KWD Less operating expenses: Salaries of McCafe personnel 16 000 KWD Depreciation of the McDonald building 5 000 KWD Salary of the McDonald manager 5 000 KWD Total expenses 26 000 KWD Net Loss on McCaf counter (1000) KWD The new intern had some doubts on his analysis, help him choose the correct net Loss or Profit to either recommend keeping the McCafe counter or eliminate it. a. Net losses of -1000 KWD; eliminate McCafe counter. b. Net Profits of 4000 KWD, keep McCafe counter. c. Net Profits of 10 000 KWD, eliminate McCafe counter. d. Net Profits of 9000 KWD, keep McCafe counter
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