Question 14 of 17 > 071 E The Grand Inn is a restaurant in Flagstaft, Arizona. It specializes in southwestern style meals in a moderate price range, Paul Weld the manager of Grand, has determined that during the last 2 years the sales mix and contribution margin ratio of its offerings are as follows Percent of Total Sales Contribution Margin Ratio 80% 15 % Appetizers Main entrees Desserts 50% 25 % 10% 8096 Beverages 25 % 80 % Paul is considering a variety of options to try to improve the profitability of the restaurant. His goal is to generate a target net income of $112.000. The company has fixed costs of $1,153,250 per year. x Your answer is incorrect Calculate the total restaurant sales and the sales of each product line that would be necessary to achieve the desired target net Income (Round intermediate calculations to 3 decimal places es. 0 251 and final answers to decimal places, es 2.510) Total restaurant sales 133.966 67 Sales from Each Product Appetizers 172.90750 Main entrees 576625 Desserts 115 125 Beverages 288.3 12.50 X Your answer is incorrect Paul believes the restaurant could greatly improve its profitability by reducing the complexity and selling price of its entrees to increase the number of clients that it serves. It would then more heavily market its appetizers and beverages. He is proposing to reduce the contribution margin ratio on the main entrees to 10% by dropping the average selling price. He envisions an expansion of the restaurant that would increase fixed costs by $584,750. At the same time, he is proposing to change the sales mix to the following Percent of Total Sales Contribution Margin Ratio Appetizers 25 % 80 % Main entrees 2596 10 % 10 % 80 % Desserts Beverages 40 % 80 % Compute the total restaurant sales, and the sales of each product line that would be necessary to achieve the desired target net income. (Round Intermediate calculations to 3 decimal places c.8. 10.251 and final answers to decimal places, as 2.5101 Total restaurant sales 974583333 Sales from Each Product Appetizers $ 100 Main entrees $ Desserts $ Beverages $ X Your answer is incorrect Suppose that Paul reduces the selling price on entrees and increases fixed costs as proposed in part (b), but customers are not swayed by the marketing efforts and the sales mix remains what it was in part (a). Compute the total restaurant sales and the sales of each product line that would be necessary to achieve the desired target net income. (Round intermediate colculations to 3 decimal places eg. 10.251 and final answers to 0 decimal places, es 2,510.J Total restaurant sales S Sales from Each Product Appetizers $ Main entrees $ Desserts S THE Beverages $ e Terythrakan Media
