Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed

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 it serves. It would then more heavily market its etizers and beverages. He is proposing 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 Contribution Margin Ratio 50% 10% 50 % 80 % Percent of Appetizers Main entrees Desserts Total Sales 25 % 25% 10% 40% Compute the total restaurant sales, and the sales of each product line that would be necessary to achieve the desired target net income. (Round intermediate calculations to 3 decimal places e.g. 10.251 and final answers to 0 decimal places, e.g. 2,510.) Total restaurant sales Sales from Each Product Appetizers Main entrees Desserts Click if you would like to Show Work for this question: 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 it serves. It would then more heavily market its etizers and beverages. He is proposing 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 Contribution Margin Ratio 50% 10% 50 % 80 % Percent of Appetizers Main entrees Desserts Total Sales 25 % 25% 10% 40% Compute the total restaurant sales, and the sales of each product line that would be necessary to achieve the desired target net income. (Round intermediate calculations to 3 decimal places e.g. 10.251 and final answers to 0 decimal places, e.g. 2,510.) Total restaurant sales Sales from Each Product Appetizers Main entrees Desserts Click if you would like to Show Work for this

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_2

Step: 3

blur-text-image_3

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

Understanding Financial Accounting

Authors: Christopher D. Burnley

3rd Canadian Edition

1119715474, 9781119715474

More Books

Students also viewed these Accounting questions

Question

Coaching and motivational behavior

Answered: 1 week ago