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please provide answer and solutions for last part The Ivanhoe Inn is a restaurant that specializes in southwestern style meals in a moderate price range.
please provide answer and solutions for last part
The Ivanhoe Inn is a restaurant that specializes in southwestern style meals in a moderate price range. Donald Martin, the manager of Ivanhoe, has determined that during the past two years the sales mix and contribution margin ratio of its offerings have been as follows: Percent of Total Sales Contribution Margin Ratio 10% 60% Appetizers Main entrees Desserts 60% 30% 10% 50% Beverages 20% 80% Donald is considering a variety of options to try to improve the restaurant's profitability. Her goal is to generate a target operating income of $140,400. The company has fixed costs of $1,146,600 per year. (a) Your answer is correct. Calculate the total restaurant sales and the sales of each product line that would be necessary in order to achieve the desired target operating income. Appetizers $ $ 286000 Entrees $ 1716000 Desserts $ 286000 Beverages $ 572000 Total sales $ 2860000 e Textbook and Media (b) Your answer is correct. Donald believes the restaurant could greatly improve its profitability by reducing the complexity and selling prices of its entrees to increase the number of clients that it serves, and by more heavily marketing its appetizers and beverages. She is proposing to drop the contribution margin ratio on the main entrees to 10% by reducing the average selling price. She envisions an expansion of the restaurant that would increase fixed costs by 50%. At the same time, she is proposing to change the sales mix to the following: Appetizers Main entrees Desserts Percent of Total Sales 20% 30% Contribution Margin Ratio 60% 10% 10% 50% Beverages 40% 80% Calculate the total restaurant sales and the sales of each product line that would be necessary in order to achieve the desired target operating income if Donald's changes are implemented. Appetizers $ 715500 Entrees $ 1073250 Desserts $ 357750 Beverages $ 1431000 Total sales $ 3577500 e Textbook and Media Attempts: 1 of 2 used (c1) Suppose that Donald drops the selling price on entrees and increases fixed costs by 50%, but customers are not swayed by the marketing efforts and the product mix remains as given in the question statement. Calculate the total restaurant sales and the sales of each product line that would be necessary in order to achieve the desired target operating income. (Round answers to the nearest whole dollar, eg. 5,275.) Appetizers $ $ Entrees $ Desserts $ Beverages $ Total sales $Step by Step Solution
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