Question: A restaurant has a caf and bar operation. The caf provides 65 percent of total revenue with a 48 percent variable cost. The bar provides

A restaurant has a caf and bar operation.

  • The caf provides 65 percent of total revenue with a 48 percent variable cost.
  • The bar provides 35 percent of total revenue with a 38 percent variable cost

Answer the following:

  1. What is the contribution margin of the caf?
  2. What is the contribution margin of the bar?
  3. What is the combined contribution margin of the caf and bar?
  4. Assume the owner wants operating income to increase by $50,000, with the increase being provided jointly by the caf and bar. What is the additional sales revenue required?

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