Question
QUESTION 3 A restaurant has three main products. Fixed costs are $397,000 and the tax rate is 35%. Other financial information is as follows: Item
QUESTION 3
A restaurant has three main products. Fixed costs are $397,000 and the tax rate is 35%. Other financial information is as follows:
Item | Average Selling price per item (in $) | Average Contribution Margin per item | Total Sales Dollars (in % of total sales) |
drinks | 10 | 60% | 40 % |
meals | 25 | 20% | 50 % |
desserts | 10 | 50% | 10 % |
What are total sales (in dollars) needed to make an after tax profit of $200,000, assuming that the sales mix remains constant?
How many drinks would they need to serve per week to make an after-tax profit of $200,000? (assume 52 weeks in a year)
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