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Paulos restaurant has a food/beverage sales mix of 75%/25%. Food cost, as a percentage of sales, for Paulos is 30% while beverage costs equals 25%.
Paulos restaurant has a food/beverage sales mix of 75%/25%. Food cost, as a percentage of sales, for Paulos is 30% while beverage costs equals 25%. If the cost structure for the individual categories (food/beverage) remains the same, yet the beverage sales mix increases to 30%, the restaurants gross profits will:
A: decline
B: increase
C:remain the same
D:none of the answers are correct
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