Projected financial results for the university€™s cafeteria for meals sold for next year are shown below.

Answer each of the following independent questions.
(a) How much are the contribution margin and the contribution rate?
(b) How many meals does the cafeteria need to sell to break even?
(c) If the cafeteria was to spend $23 000 to upgrade its processes, how much does the cafeteria need to sell to break even?
(d) If 5% more meals were sold, what would be the resulting net income?

Transcribed Image Text:

Sales $946 000 Fixed cost Total variable cost $588 000 227 040 Total cost 815 040 Net income $130 960