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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 | % | 70 | % | ||
Main entrees | 50 | % | 25 | % | ||
Desserts | 10 | % | 80 | % | ||
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 $115,000. The company has fixed costs of $1,142,000 per year.
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