Exercise 3.2

I. Assume that variable costs are not controlled and that budgeted costs of sales for food and beverage increase to $600,000 and total sales are as budgeted ($1,665.472.20). Calculate profit for Barnaby's Hideaway. All other costs remain the same.

2. Calculate the new variable rate and new contribution rate, assuming the same variable salaries and employee benefits.

3. Calculate the break-even point for Barnaby's Hideaway using the new contribution rate.

4. Using the new contribution rate, calculate the sales level necessary for Barnaby's Hideaway to earn the budgeted profit of $166,794.43.

5. Assum e that the new contribution margin falls to $12.60. Calculate the number of customers necessary to break even.

HMT 2215 Income Statement/Break-Even starter problem 1. Un-Jumble the Income statement, put in the proper format, and find the profit or loss. 2. Compute the Break-even Analysis 3. If profit increased 15,000 how much sales in dollars would need to be generated? 4. If the Avg Sales price is 74.00; How many Units will be needed to breakeven? Office Supplies Expense 2,500 Cost of Goods Sold 113,500 Depreciation 5,000 Advertising Expense 17,000 Labor Expense 52,500 (65% Fixed) Benefits Expense 17,500 (65% Fixed) Insurance Expense 3,000 Income Taxes 12,725 Administrative Expense 21,825 Returns 4,000 Rent Expense 19,000 Gross Sales 380,000 Utilities Expense 7,000 Allowances 4,500 Interest Expense 4,600 Selling Expense 16,500 Legal Expense 4,500 HMT 2215 Income Statement/Break-Even starter problem 1. Un-Jumble the Income statement, put in the proper format, and find the profit or loss. 2. Compute the Break-even Analysis 3. If profit increased 15,000 how much sales in dollars would need to be generated? 4. If the Avg Sales price is 74.00; How many Units will be needed to breakeven? Office Supplies Expense 2,500 Cost of Goods Sold 113,500 Depreciation 5,000 Advertising Expense 17,000 Labor Expense 52,500 (65% Fixed) Benefits Expense 17,500 (65% Fixed) Insurance Expense 3,000 Income Taxes 12,725 Administrative Expense 21,825 Returns 4,000 Rent Expense 19,000 Gross Sales 380,000 Utilities Expense 7,000 Allowances 4,500 Interest Expense 4,600 Selling Expense 16,500 Legal Expense 4,500