Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Cullumber Inn is a restaurant in Flagstaff, Arizona. It specializes in southwestern style meals in a moderate price range. Paul Weld, the manager of

The Cullumber Inn is a restaurant in Flagstaff, Arizona. It specializes in southwestern style meals in a moderate price range. Paul Weld, the manager of Cullumber, has determined that during the last 2 years the sales mix and contribution margin ratio of its offerings are as follows. Sales mix is determined using total sales dollars.
Appetizers
Main entrees
Desserts
Beverages
Percent of
Total Sales
15%
50%
10%
25%
Contribution
Margin Ratio
50%
25%
50%
80%
Paul is considering a variety of options to try to improve the profitability of the restaurant. His goal is to generate a target net income of $149,760. The company has fixed costs of $1,347,840 per year.
Calculate the total restaurant sales and the sales of each product line that would be necessary to achieve the desired target net income. (Round intermediate calculations to 3 decimal places e.g.0.251 and final answers to O decimal places, e.g.2,510.)
Total restaurant sales
Sales from Each Product
Appetizers
Main entrees
Desserts
Beverages

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_2

Step: 3

blur-text-image_3

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

Managerial Accounting Tools for Business Decision Making

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

7th edition

978-1118334331, 1118334337, 978-1119036449, 1119036445, 978-1119036432

More Books

Students also viewed these Accounting questions

Question

When is the deadline?

Answered: 1 week ago