Answered step by step
Verified Expert Solution
Question
1 Approved Answer
x=8 y=7 z=1 and t=5 Company X is a restaurant in Salihli, Manisa. It specializes in southwestern style meals in moderate price range. Ziya Takent,
x=8 y=7 z=1 and t=5
Company X is a restaurant in Salihli, Manisa. It specializes in southwestern style meals in moderate price range. Ziya Takent, the manager of Company X, has determined that during the last 2 years the sales mix and contribution margin ratio of its offerings are as follows: Item Appetizers Main Entrees Desserts Beverages Percent of Total Sales 10% 5y% 12% Contribution Margin Ratio 50% 23% 50% 82% Ziya Bey's goal is to generate a target net income of TL113,000. The company has fixed costs of TL1,052,000 per annum. Q-4) Calculate the sales of Beverages in TL that would be necessary to achieve the desired target net income. Q-5) Ziya Bey believes the restaurant could greatly improve its profitability by reducing the complexity and selling price of its entrees to increase the number of clients that it serves. It would then more heavily market its appetizers and beverages. He is proposing to reduce the contribution margin ratio on the main entrees to 10% by dropping its average selling price. He envisions an expansion of the restaurant that would increase fixed costs by an additional TL587,000. At the same time, he is proposing to change sales mix as follows: Item Appetizers Main Entrees Desserts Beverages Percent of Total Sales 25% 2x% 10% Contribution Margin Ratio 5t% 10% 52% 80% Calculate the sales of Beverages in TL that would be necessary to achieve the desired target net income. Q-6) Suppose that Ziya Bey reduces the selling price on entrees and increases the fixed costs as proposed in Question 5, but customers are not swayed by the marketing efforts and the sales mix remains what it was in Question 4. Calculate the sales of Beverages in TL that would be necessary to achieve the desired target net incomeStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
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