Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Bricktown Pub is a restaurant that specializes in classic east coast fare in a moderate price range. Debbie Mach-lei], the manager of Bricktown, has

image text in transcribed
image text in transcribed
The Bricktown Pub is a restaurant that specializes in classic east coast fare in a moderate price range. Debbie Mach-lei], the manager of Bricktown, has determined that during the last. two years the sales mint and contribution margin of its offerings are as follows: Percent of Total Sales Contribution Margin Ratio Appetizers 10% 50% Main 55% 30% entrees Desserts 10% 50% Beverages 25% T5% Debbie is considering a variety of options to try to hnprove the restaurant's protability. Her goal is to generate a target operating income of $155,000. The company has xed costs of $400,000 per year. Instructions [a] Calculate the total restaurant sales and the sales of each product line that would be necessary in order to achieve the desired target operating income. {b} Debbie believes the restaurant could greatly improve its protability by reducing the complexity and selling prices of its entrees to increase the number of clients that it serves, and by more heavily marketing its appetizers and beverages. She is proposing to reduce the contribution margin on the main entrees to 15% by dropping the average selling price. She envisions an expansion of the restaurant that would increase tted costs by 50%. At the same time, she is proposing to change the sales mitt to the following: Percent of Total Sales Contribution Margin Ratio Appetizers 15% 50% Main 30% 15% entrees Desserts 15% 50% Beverages 40% T5%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Corporate Financial Accounting

Authors: Carl S Warren, Jeff Jones

16th Edition

0357510380, 978-0357510384

More Books

Students also viewed these Accounting questions

Question

Define Management or What is Management?

Answered: 1 week ago

Question

What do you understand by MBO?

Answered: 1 week ago

Question

What is meant by planning or define planning?

Answered: 1 week ago

Question

Define span of management or define span of control ?

Answered: 1 week ago

Question

The personal characteristics of the sender

Answered: 1 week ago

Question

The quality of the argumentation

Answered: 1 week ago