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need answers to all empty red boxes plz Blue Spruce Cafeteria operates cafeteria food services in public buildings in the Midwest. Blue Spruce is contemplating
need answers to all empty red boxes plz
Blue Spruce Cafeteria operates cafeteria food services in public buildings in the Midwest. Blue Spruce is contemplating a major change in its cost structure. Currently, all of their cafeteria lines are staffed with hourly wage employees who hand serve the food to customers. Benson Riggs, Blue Spruce's owner, is considering replacing the employees with an automated self-service system. However, before making the change, Benson would like to know the consequences of the change, since the volume of business varies significantly from location to location. Shown below are the CVP income statements for each alternative. (a) (d) Blue Spruce's vice president of finance has offered another option. He suggests a different system that combines personal service at key points in the cafeteria line with a less expensive automated self -service system for the other items. The financial information on this system is given below: (1) Determine the degree of operating leverage for this option. (Round answer to 2 decimal places, e.g. 15.25.) Operating leverage (2) How much would net income increase if sales increased by $216,000 ? (Round answer to 2 decimal places, e.g. 15.25\%.) Net income % (3) Using the margin of safety ratio, how large of a decline in sales could this option sustain before operating at a loss. (Round margin of safety ratio to 2 decimal places, e.g. 0.25 and decline in sales to 0 decimal places, e.g. 125.)Step by Step Solution
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