The Bridal Palace in Stepford, GA has three distinct segments:

The Main Room Restaurant has departmental operating leverage of 2.6, annual revenues of $8,400,000

and net operating income of $2,100,000

The Sophisticates Lounge, a high-end restaurant, has annual revenues of $4,500,000, fixed costs of

$775,000 and a variable cost ratio of 40%

The banquets and functions department has a margin of safety percentage of 30%, fixed costs of

$2,550,000, and a contribution margin ratio of 45%

Please answer the following questions, showing all work in order to receive credit:

1.1 Make a contribution format income statement for the Caf Escadrille, including

contribution margin and net operating income for each department and for the Caf in total.

1.2 What is the break-even point in total sales dollars for the Caf? (4)

1.3 What is the breakeven point for the Sophisticiates Lounge

1.4 Assuming a 25% tax rate, what level of sales is required for the Caf to earn an after-tax net

income of $1,500,000. (5)