PART A AND B ARE COMPLETE, PLEASE ANSWER PART C

The Carla Vista Inn is a restaurant that specializes in southwestern style meals in a moderate price range. Joseph Moore, the manager of Carla Vista, has determined that during the past two years the sales mix and contribution margin ratio of its offerings have been as follows:

		Percent of Total Sales		Contribution Margin Ratio
Appetizers		10%		60%
Main entrees		60%		30%
Desserts		10%		50%
Beverages		20%		80%

Joseph is considering a variety of options to try to improve the restaurants profitability. Her goal is to generate a target operating income of $166,400. The company has fixed costs of $1,144,000 per year.

a. Calculate the total restaurant sales and the sales of each product line that would be necessary in order to achieve the desired target operating income.

b. Joseph believes the restaurant could greatly improve its profitability by reducing the complexity and selling prices of its entrees to increase the number of clients that it serves, and by more heavily marketing its appetizers and beverages. She is proposing to drop the contribution margin ratio on the main entrees to 10% by reducing the average selling price. She envisions an expansion of the restaurant that would increase fixed costs by 50%. At the same time, she is proposing to change the sales mix to the following:

		Percent of Total Sales		Contribution Margin Ratio
Appetizers		20%		60%
Main entrees		30%		10%
Desserts		10%		50%
Beverages		40%		80%

Calculate the total restaurant sales and the sales of each product line that would be necessary in order to achieve the desired target operating income if Josephs changes are implemented.

c. Suppose that Joseph drops the selling price on entrees and increases fixed costs by 50%, but customers are not swayed by the marketing efforts and the product mix remains as given in the question statement. Calculate the total restaurant sales and the sales of each product line that would be necessary in order to achieve the desired target operating income. (Round answers to the nearest whole dollar, e.g. 5,275.)

Appetizers 291200 Entrees $ $ $ 1747200 Desserts 291200 Beverages $ 582400 Total sales $ 2912000 Appetizers 724000 $ $ Entrees 1086000 Desserts LA 362000 Beverages 1448000 $ $ Total sales 3620000