P6-3A The Grand Inn is a restaurant in Flagstaff, Arizona. It specializes in s style meals in a moderate price range. Paul Weld, the manager of Grand, has do that during the last 2 years the sales mix and contribution margin ratio of its in southwestern of its offerings are as follows Appetizers Main entrees Desserts Beverages Percent of Total Sales 15% 50% 10% 25% Contribution Margin Ratio 50% 25% 50% 80% Paul is considering a variety of options to try to improve the profitability of the res His goal is to generate a target net income of $117,000. The company has fixed $1,053,000 per year Instructions (a) Calculate the total restaurant sales and the sales of each product line that would be necessary to achieve the desired target net income. (b) Paul believes the restaurant could greatly improve its profitability by reducing the complexity and selling price of its entrees to increase the number of clients that serves. It would then more heavily market its appetizers and beverages. He is propos ing to reduce the contribution margin ratio on the main entrees to 10% by dropping the average selling price. He envisions an expansion of the restaurant that would increase fixed costs by $585,000. At the same time, he is proposing to change the sales mix to the following. Appetizers Main entrees Desserts Beverages Percent of Total Sales 25% 25% 10% 40% Contribution Margin Ratio 50% 10% 50% 80% Compute the total restaurant sales, and the sales of each product line that would necessary to achieve the desired target net income. ct line that would be c) Suppose that Paul reduces the selling price on entrees and increases fix proposed in part (b), but customers are not swayed by the marketing etto sales mix remains what it was in part (a). Compute the total restaurant rketing efforts and the staurant sales and the sales