Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Mr. Park recently opened a high-end Korean cafe in Jnkping. Since he has limited accounting knowledge, he has asked for your help about certain factors

image text in transcribed

Mr. Park recently opened a high-end Korean cafe in Jnkping. Since he has limited accounting knowledge, he has asked for your help about certain factors related to his business, which also serves lunch and dinner. Mr. Park informs you that his fixed costs is $25,200 per month. The average total bill to a customer who visits the cafe is $21.60 per customer and the average variable cost per meal is $11.60. Required (show your workings for calculations & write in your own words): (a) How many meals must the cafe serve to achieve a profit of $10.080? (2 points) (b) What is Mr. Park's break-even point in number of meals served per month? (2 points) (c) Mr.Park's fixed costs increased to a total of $35,910 per month and average variable costs also increased to $13.90 per meal. If Mr. Park increases his average price to $26.90, how many meals must be sold in order for Mr.Park to make a profit of $10,080 per month? (2 points) (d) Briefly discuss any two assumptions that must be held in performing a cost-volume-profit analysis. (4 points)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

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

Value Added Auditing CERM Academy Series On Enterprise Risk Management

Authors: Greg Hutchins

4th Edition

978-0965466554

More Books

Students also viewed these Accounting questions

Question

Write a research paper on java language.

Answered: 1 week ago

Question

Who are the participants in securities lending?

Answered: 1 week ago

Question

Design a health and safety policy.

Answered: 1 week ago