Problem $1\mathrm{.}47($Algo$)$ Cost Data for Managerlal Purposes $($LO $1\mathrm{.}3)$

Langholm Bistro is a popular restaurant in a small, coastal village. Brlan Langholm, who opened the restaurant five years ago, has seen

It grow steadlly. Currently, Langholm's is only open for dinner, but many of the regular customers have been asking Brian to consider

opening for lunch as well. Brlan has been talking to his accountant about the financlal Impact of the expanded services on the overall

business. He knew that the bistro did not make much money and he was concerned that the new business might be too risky. The

accountant asked Brian for his best estimates of the Impact of the new business on revenues and costs. He had been thinking about

this for some time and estimated that revenues would grow by about $25$ percent. Food costs would increase by about $40$ percent and

labor costs by about $25$ percent. Rent on the blstro would not change, but utilitles would Increase by about $20$ percent. Other costs

would Increase by $10$ percent. The salary Brlan pays himself as manager of the bistro would not change. A few days later, Brlan's

accountant stops by with the following estimated income statement assuming Brian adds the lunch business.

Required:

a$-1.$ Prepare an income statement for dinner service only.

a$-2$ Based on the financlal Impact, should Brlan open the bistro for lunch?

Complete this question by entering your answers in the tabs below.

Prepare an income statement for dinner service only.

Note: Round your intermediate calculations and final answers to nearest whole dollar.

b$.$ Are there other factors he should consider?

Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct

answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark

will be automatically graded as incorrect.

Whether this will lead to customers switching from dinner to lunch.

$?$ What other restaurants might do$.$

Whether the longer opening hours might cause the restaurant to lose some of its appeal.

Whether this will lead to enhancement of storage facilltles.

$?$ Whether the longer opening hours might cause the restaurant to recrult additional starf.