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PROJECT 2 - COST - VOLUME PROFIT ANALYSIS El Cantina Restaurant Juanita Arnaz owns and operates a small restaurant specializing in Mexican food. Lunch and dinner is served seven days per week. She has provided you with the following data and asked you to provide the required analysis to assist her in evaluating the current situation and the effect of some changes she is considering making. Monthly fixed costs. $15,750 Average total bill (excluding tax, gratuities and beverages). $19.75 Current variable cost per meal served.. $8.63 Desired monthly profit (before tax)... $6,000 Required: (A) Considering the above data, calculate how many meals must be served to attain the profit objective? (B) Considering the above data what is the monthly break-even point in the number of meals served? (C) Arnaz anticipates some changes to her costs and anticipates raising her prices. Taking into consideration the changes mentioned below how many meals must she serve to make her desired monthly profit (as stated above)? Increase in rent and other fixed costs to. $18,000 Increase in the variable cost per meal to.. $9.35 Increase her average price charged per meal to.. $22.50 (D) Arnaz's accountant tells her that she may lose some of her customers if she increases her prices (as in (C) above). Based on the changes provided below calculate the net effect (reduction in profit) on Arnaz's monthly profit if the customers are indeed lost. Customers lost (stated as a percentage).. 10.0% Customers prior to the increase in price (assume 4,500 (E) To help offset the anticipated loss in customers mentioned in (D) above, Arnaz is considering hiring a guitarist to perform for four hours each night. Arnaz feels this would increase her cliental. Based on the additional cost and the additional customers presented below, would Arnaz's total profit change? And by how much? Guitarist's monthly fee..... $1,900 Anticipated increase in customers. 380---__beim Project Number 2_ Evaluation_ __ _- - - Cost - Volume Profit Analysis Marks Marks Available Obtained The Nordic Nest: OUT OF 5.0% Professional Design and Submission 0.5 Use of Excel and Features 0.5 MARK Correct Analysis 5 0 El Cantina Restaurant: OUT OF 5.0% Professional Design and Submission 0.5 Use of Excel and Features 0.5 MARK Correct Analysis 5 0 Rotten Ronnie's Pub and Grill: OUT OF 5.0% Professional Design and Submission 0.5 Use of Excel and Features 0.5 MARK Correct Analysis 5 0 15