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The Creekside Inn is a restaurant that specializes in southwestern style meals in a moderate price range. Terry Ducasse, the manager of Creekside, has determined
The Creekside Inn is a restaurant that specializes in southwestern style meals in a moderate price range. Terry Ducasse, the manager of Creekside, has determined that during the last two years the sales mix and contribution margin ratio of its offerings have been as follows:
Percent of Total Sales | Contribution Margin Ratio | |||
Appetizers | 11% | 60% | ||
Main entrees | 59% | 31% | ||
Desserts | 11% | 51% | ||
Beverages | 19% | 80% |
Terry is considering a variety of options to try to improve the restaurants profitability. Her goal is to generate a target operating income of $155,000. The company has fixed costs of $1,257,130 per year.
Calculate the total restaurant sales and the sales of each product line that would be necessary in order to achieve the desired target operating income. Appetizers Entrees Desserts Beverages Total sales$Step by Step Solution
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