The Grand Inn is a restaurant in Flagstaff, Arizona. It specializes in southwestern style meals in a moderate price range. Paul Weld, the manager of
The Grand Inn is a restaurant in Flagstaff, Arizona. It specializes in southwestern style meals in a moderate price range. Paul Weld, the manager of Grand, has determined that during the last 2 years the sales mix and contribution margin ratio of its offerings are as follows.
Percent of Total Sales | Contribution Margin Ratio | |||||
Appetizers | 15 | % | 80 | % | ||
Main entrees | 50 | % | 25 | % | ||
Desserts | 10 | % | 50 | % | ||
Beverages | 25 | % | 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 $120,000. The company has fixed costs of $1,345,200 per year.
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
A-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 0 decimal places, e.g. 2,510.)
Total restaurant sales
$ ???
Appetizers
$
Main entrees
$
Desserts
$
Beverages
$
Step by Step Solution
There are 3 Steps involved in it
Step: 1
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started