Question
Reina Club generates its revenues from food and beverage sales. Assume that food revenue is $110,000 with a variable cost (VC) of $65,000 and beverage
Reina Club generates its revenues from food and beverage sales. Assume that food revenue is $110,000 with a variable cost (VC) of $65,000 and beverage revenue is $80,000 with a VC of $35,000. This club has a fixed cost (FC) of $150,000 and wishes to make $70,000 desired profit from its food and beverage (F&B) operations. Based on the information given, how much addi-tional revenue must be generated by Reina to achieve the desired profit?
Last month, the revenues of rooms and catering department of the Lawren & Henny Luxury Suites were $310,000 and $190,000, respectively. The variable costs (VCs) for rooms and catering departments were $155,000 and $75,000, respectively. Suddenly, this month, room's revenue has increased by 10.00%, catering revenue has increased by 8.00%, and there is a 12.00% decrease in VC for both departments. Imagine that the total fixed cost is $200,000. How much reduction in total revenue at the breakeven has Lawren & Henny Luxury Suites experienced before and after the changes in both revenues and VCs
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