Answer C

Your answer is correct. Paul 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 the average selling price. He envisions an expansion of the restaurant that would increase fixed costs by $587,550. At the same time, he is proposing to change the sales mix to the following Appetizers Main entrees Desserts Percent of Total Sales 25 % 25 % 10% 40 % Contribution Margin Ratio 80 % 10 % 50 % 80 % Beverages Compute the total restaurant sales, and the sales of each product line that would be necessary to achieve the desired target net income. (Round intermediate calculations to 3 decimal places eg. 10.251 and final answers to decimal places, eg. 2,510) Total restaurant sales $ 3,450,000 Sales from Each Product Appetizers $ 862,500 Main entrees $ 862,500 345,000 $ Desserts 138000 $ Beverages Question 2 of 4 e Textbook and Media Attempts: 1 of 6 used (c) X Your answer is incorrect. Suppose that Paul reduces the selling price on entrees and increases fixed costs as proposed in part (b), but customers are not "swayed by the marketing efforts and the sales mix remains what it was in part (a). Compute the total restaurant sales and the sales of each product line that would be necessary to achieve the desired target net income. (Round intermediate calculations to 3 decimal places eg. 10.251 and final answers to decimal places, eg. 2,510.) Total restaurant sales $ 2960000 Sales from Each Product Appetizers $ 444,000 Main entrees $ 1.480.000 Desserts $ 296,000 Beverages $ 740,000 Textbook and Media Preview (2).pdf O Preview (1).pdf Webex.pkg Your answer is correct. Paul 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 the average selling price. He envisions an expansion of the restaurant that would increase fixed costs by $587,550. At the same time, he is proposing to change the sales mix to the following Appetizers Main entrees Desserts Percent of Total Sales 25 % 25 % 10% 40 % Contribution Margin Ratio 80 % 10 % 50 % 80 % Beverages Compute the total restaurant sales, and the sales of each product line that would be necessary to achieve the desired target net income. (Round intermediate calculations to 3 decimal places eg. 10.251 and final answers to decimal places, eg. 2,510) Total restaurant sales $ 3,450,000 Sales from Each Product Appetizers $ 862,500 Main entrees $ 862,500 345,000 $ Desserts 138000 $ Beverages Question 2 of 4 e Textbook and Media Attempts: 1 of 6 used (c) X Your answer is incorrect. Suppose that Paul reduces the selling price on entrees and increases fixed costs as proposed in part (b), but customers are not "swayed by the marketing efforts and the sales mix remains what it was in part (a). Compute the total restaurant sales and the sales of each product line that would be necessary to achieve the desired target net income. (Round intermediate calculations to 3 decimal places eg. 10.251 and final answers to decimal places, eg. 2,510.) Total restaurant sales $ 2960000 Sales from Each Product Appetizers $ 444,000 Main entrees $ 1.480.000 Desserts $ 296,000 Beverages $ 740,000 Textbook and Media Preview (2).pdf O Preview (1).pdf Webex.pkg