Restaurant du Tennis is a restaurant in Montreux, Switzerland. The restaurants chef has a gross salary composed of a fixed part and a variable part:

Fixed part: 5000 CHF per month over 12 months.

Variable part: 1 CHF for every cover sold.

The chef is the only employee to have a portion of his salary based on activity. Assume that marketing, rent, maintenance and other expenses do not vary in function of the activity.

For 2015 and 2016:

a) Using the contribution margin format (clearly separating variable costs together from fixed costs, and showing the contribution margin), prepare the Restaurant du tennis income statement for the year ending on December 31 2016.

b) For 2015 and 2016, compute the operating leverage of the restaurant, the breakeven point in sales and units, and the margin of safety in sales and units. Hotel Financial Statement Analysis c) Using the operating leverage of 2016, and assuming that you expect sales growth of 15% in 2017, by how much should the operating income vary? Which hypotheses must hold in order for your answer to be correct? Explain your answer

Restaurant du Tennis's income statement (31.12) in CHF Restaurant du Tennis's income statement (31.12) in CHF -Contribution margin layout in% in% 2015 780,000 312,000 468,000 2016 1,014,000 405,600 608,400 2015 2016 Sales revenue Cost of sales Gross profit Operating expenses Sales revenue Variable cost of sales Variable operating expenses Total variable costs Contribution margin Salaries Marketing Rent Maintenance Other expenses 213,000 12,000 0,000 7,000 13,000 295,000 173,000 215,600 12,120 50,000 8,050 13,650 299,420 308,980 Fixed costs: Salaries Marketing Rent Maintenance Other expenses Total fixed costs Total costs Operating profit Total operating expenses Operating profit Additional information Cover price Covers sold Average cost per cover 60 13,000 24 65 15,600 26 CVP analysis Contribution margin Covers sold Contribution per cover Operating leverage Breakeven point in units Breakeven point in CHF Margin of safety (in units) Margin of safety (in CHF) Expected sales variation (2017) Expected variation in operating income (2017) 2015 2016 Which Enter your text here theses must hold in order for your answer to be correct? Explain your