Question
The Grand Inn is a restaurant in Flagstaff, Arizona. It specializes in southwestern style meals in a moderate price range. Paul Weld, the manager
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 % 70 % 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 $116,000. The company has fixed costs of $1,213,600 per year.
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