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please give al math A local Zaxby's chain has proposed starting to cater meals. Their proposed price for meals are $20 each. Fixed expenses are
please give al math
A local Zaxby's chain has proposed starting to cater meals. Their proposed price for meals are $20 each. Fixed expenses are as follows, $50000 for general licensing expenses, $2500 for equipment, and a salary of $10000 for each of the three main labor employees, there is also a total of $500ooo of salary to be split between the owner and manager. Wages for staff is $0.25, cooking costs are $0.10, gas costs are $0.15, wages for drivers are $5, boxes are $i, and there are $4 in commissions, with a remaining food costs of $4.50 to total variable expenses. Operating outcomes for the prior year: Sales: $1.5 million, Contribution Margin of $750000, Fixed Expenses of $500ooo, Variable Expenses of $750000, and Net Operating Income of $450000. 1. Using a per unit basis of variable expenses, contribution margin, and sales, restate results of operation and give ratios. 2. Determine the break-even point while using the contribution margin ratio in dollar sales. 3. On the assumption that there is an increase of $500000 of fixed expenses and an increase in 10000 required meals for the year, there will be more prep time and deliveries made. How will this affect the operating income for the year? 4. Using sales from last year, calculate the degree of operating leverage. Using the original contribution margin income statement, there is a desired 10% increase to unit sales to be made. Using last year's degree of operating leverage, calculate the net income increase the company will have this year. Use contribution margins to check and show. 5. The store's manager says to achieve an increase in meal sales of 25%, there must be a $25000 increase in advertising costs as well as a 10% reduction in selling price. Is this correct? If so, what would be the net operating income? What amount of affect will this have on net operating income throughout the year? 6. As opposed to changing the sale price, a drink is proposed to be added to the meal. This would equate to a $2.50 increase to variable costs per meal. This as well as an increase in advertising expenses will increase sales by 20%. How much will advertising expenses have to increase to still earn the same net operating income as the year prior? 7. What are three potential strategies that would help the company increase sales, cut fixed and variable costs, and still deliver quality products whole also increasing operating income Step by Step Solution
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