Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

P2.6 With reference to the information provided for Cindy's Restaurant in Prob- lem 2.5 (round all percentage calculations to a whole percentage): for each of

image text in transcribed
image text in transcribed
image text in transcribed
P2.6 With reference to the information provided for Cindy's Restaurant in Prob- lem 2.5 (round all percentage calculations to a whole percentage): for each of the three C. If there were a shift of $8,000 in sales revenue from the banquet area to the dining room, would you expect the restaurant's overall operating income to increase or decrease? Explain your reasoning to support your answer. d. Assuming that the shift of $8,000 of sales revenue does occur, total sales revenue will not change. Total indirect, undistributed costs will not change. Cost of sales, wages and salaries costs, and other direct costs must be recalculated for each division to find the new departmental to- tal operating income. e. After allocating the indirect costs, would you now consider closing any of the divisions? Why or why not? P2.5 Cindy's Restaurant has three sales revenue departments with direct costs and average monthly figures given in the following information: Departments Sales revenue Cost of sales Wages and salaries cost Other direct costs Dining $204,000 81,600 65,280 18,360 Banquets $110,000 41,800 35,200 8,800 Beverages $92,000 29,440 12,880 1,840 The restaurant also has the following indirect, undistributed costs: Administrative and general expenses Marketing expenses Utilities expense Property operation and maintenance Depreciation expense Insurance expense $12,000 10,000 5,000 12,120 14,000 4,000 P2.6 With reference to the information provided for Cindy's Restaurant in Prob- lem 2.5 (round all percentage calculations to a whole percentage): for each of the three C. If there were a shift of $8,000 in sales revenue from the banquet area to the dining room, would you expect the restaurant's overall operating income to increase or decrease? Explain your reasoning to support your answer. d. Assuming that the shift of $8,000 of sales revenue does occur, total sales revenue will not change. Total indirect, undistributed costs will not change. Cost of sales, wages and salaries costs, and other direct costs must be recalculated for each division to find the new departmental to- tal operating income. e. After allocating the indirect costs, would you now consider closing any of the divisions? Why or why not? P2.5 Cindy's Restaurant has three sales revenue departments with direct costs and average monthly figures given in the following information: Departments Sales revenue Cost of sales Wages and salaries cost Other direct costs Dining $204,000 81,600 65,280 18,360 Banquets $110,000 41,800 35,200 8,800 Beverages $92,000 29,440 12,880 1,840 The restaurant also has the following indirect, undistributed costs: Administrative and general expenses Marketing expenses Utilities expense Property operation and maintenance Depreciation expense Insurance expense $12,000 10,000 5,000 12,120 14,000 4,000

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

Investing In The Trump Era How Economic Policies Impact Financial Markets

Authors: Nicholas P. Sargen

1st Edition

3319760440,3319760459

More Books

Students also viewed these Finance questions

Question

How do interpersonal relationships influence health?

Answered: 1 week ago