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Pats Pizzeria produces three types of deli style pizzas: Thin Crust, Deep Dish, and Stuffed Crust. Pats anticipated sales mix is 4:5:6 Thin:Deep:Stuffed. Current sales
Pat’s Pizzeria produces three types of deli style pizzas: Thin Crust, Deep Dish, and Stuffed Crust. Pat’s anticipated sales mix is 4:5:6 Thin:Deep:Stuffed. Current sales are 1,500 bundles per year. Thin Crust Deep Dish Stuffed Crust Unit Selling Price $15 $18 $20 Unit Variable Cost $8 $10 $11 Fixed costs are estimated at $50,000, which include $44,000 for general overhead, such as rent, utilities, etc., and $6,000 for advertising. Pat’s tax rate is 20%. Round all interim answers to 4 decimal places. For all questions, supporting calculations MUST be included. What is the operating leverage ratio when 1,500 bundles are sold? If sales increase by 15% from this level, by what percentage should Pat expect profit before tax to increase? How much is this increase in dollars? What is Pat’s expected profit before tax in dollars?
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AnswerA T hin Crus t Deep Dish Stuffed Crust Total Unit sold 400 500 600 1500 U nit pric e T otal U ...Get Instant Access to Expert-Tailored Solutions
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