Paul believes the restaurant could greatly improve its profitability by reducing the complexity and selling price...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Paul believes the restaurant could greatly improve its profitability by reducing the complexity and selling price of its entrees to increase the number of dlients 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 $584,750. At the same time, he is proposing to change the sales mix to the following Percent of Contribution Total Sales Margin Ratio Appetizers 25 % 80 % Main entrees 25 % 10 % Desserts 10 % 80 % Beverages 40 % 80 % 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 0 decimal places, eg. 2,510.) Total restaurant sales $ 1895600 Sales from Each Product Appetizers 473900 Main entrees 473900 Desserts 189560 Beverages 758240 %24 %24 %24 %24 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 e.g. 10.251 and final answers to O decimal places, eg. 2,510.) Total restaurant sales 935600 Sales from Each Product Appetizers 233900 Main entrees 233900 Desserts 93560 Beverages 374240 eTextbook and Media %24 %24 %24 %24 %24 Paul believes the restaurant could greatly improve its profitability by reducing the complexity and selling price of its entrees to increase the number of dlients 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 $584,750. At the same time, he is proposing to change the sales mix to the following Percent of Contribution Total Sales Margin Ratio Appetizers 25 % 80 % Main entrees 25 % 10 % Desserts 10 % 80 % Beverages 40 % 80 % 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 0 decimal places, eg. 2,510.) Total restaurant sales $ 1895600 Sales from Each Product Appetizers 473900 Main entrees 473900 Desserts 189560 Beverages 758240 %24 %24 %24 %24 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 e.g. 10.251 and final answers to O decimal places, eg. 2,510.) Total restaurant sales 935600 Sales from Each Product Appetizers 233900 Main entrees 233900 Desserts 93560 Beverages 374240 eTextbook and Media %24 %24 %24 %24 %24
Expert Answer:
Answer rating: 100% (QA)
Situtation 1 where Target Net Income is 112000 and Fixed Cost is 1431750 sales Contrib... View the full answer
Related Book For
Statistics for Managers Using Microsoft Excel
ISBN: 978-0133130805
7th edition
Authors: David M. Levine, David F. Stephan, Kathryn A. Szabat
Posted Date:
Students also viewed these accounting questions
-
Kim ken Corporation's contribution margin ratio on the sale of its most popular product is 40%. The product is priced at $89, annual fixed expenses are $845,000. Management is evaluating two options:...
-
Kim ken Corporation's contribution margin ratio on the sale of its most popular product is 40%. The product is priced at $89, annual fixed expenses are $845,000. Management is evaluating two options:...
-
The owner of a restaurant that serves Continental-style entrees has the business objective of learning more about the patterns of patron demand during the Friday-to-Sunday weekend time period. Data...
-
In Problems 544, solve each logarithmic equation. Express irrational solutions in exact form. 2 log 6 (x + 2) = 3 log 6 2 + log 6 4
-
Kathys Mats produces and sells artistic placemats for dining room tables. These placemats are manufactured out of recycled plastics. For last year and this year each mat has a variable manufacturing...
-
The spot rate S(AUD/JPY) is 82.9300 (AUD - Australian Dollar; JPY = Japanese Yen) in t. Also, in t the interest rate in New Zealand is 0.11% while the interest rate in Japan is -0.10%. What is the...
-
Determine the vertical displacement of joint \(C\). The truss is made from A-36 steel bars having a cross-sectional area of \(150 \mathrm{~mm}^{2}\). Af H F 2 m B -1.5 m 1.5m C 1.5 m-1.5 m 6 kN 6 kN...
-
Consider the following project network. Note that the normal or expected activity times are denoted Ïi, I = A, B, . . . , I. Let xi = the earliest finish time for activity i. Formulate a linear...
-
Sunland Inc. requires a return for the Picture Division totalling 10.00%. Which projects would either add value to or retain value for the company? Average Operating Projects Assets Controllable...
-
Laurens Beauty Boutique has experienced the following weekly sales: Forecast sales for week 6 using the nave method, a simple average, and a three-period moving average. Week 1 2 3 4 5 Sales 420 382...
-
Suppose the aggregate demand curve is given by the equation: Y = 460 + 20M/P. The full-employment level of output is 800 and the current nominal money supply is 25. If the economy is in...
-
Why is face-to-face communication generally preferable when sending messages?
-
Cross-cultural research on motivation is very nuanced and addresses many variables. What does it mean when a culture is described as tight? What is a loose culture?
-
How does culture influence an organizations information system?
-
Why is cultural appropriateness an issue in technology transfer? Provide examples and challenges that may arise.
-
For decades, labor union membership has been on the decline in most developed nations. What are the reasons for this and how could labor unions increase their memberships?
-
Jennifer is a CERTIFIED FINANCIAL PLANNERprofessional. Her wealthiest client is Brad with whom she has been working for the past 15 years. Angelina also holds the CFPcredential. Angelina approached...
-
SCHEDULE OF COST OF GOODS MANUFACTURED The following information is supplied for Sanchez Welding and Manufacturing Company. Prepare a schedule of cost of goods manufactured for the year ended...
-
The data in Toys R Us are quarterly revenues (in $millions) for Toys R Us from 1996-Q1 through 2012-Q2. (Data extracted from Standard & Poor's Stock Reports, November 1995, November 1998, and April...
-
A computer information systems professor is interested in studying the amount of time it takes students enrolled in the Introduction to Computers course to write a program in Visual Basic. The...
-
Suppose that you are going to collect a set of data, either from an entire population or from a random sample taken from that population. a. Which statistical measure would you compute first: the...
-
The two circular disks, each of mass \(m_{1}\), are connected by the curved bar bent into quarter-circular arcs and welded to the disks. The bar has a mass \(m_{2}\). The total mass of the assembly...
-
The turbine rotor in a ship's power plant has a mass of \(1000 \mathrm{~kg}\), with center of mass at \(G\) and a radius of gyration of \(200 \mathrm{~mm}\). The rotor shaft is mounted in bearings...
-
A body weighing \(25 \mathrm{lb}\) is suspended from a spring of constant \(k=160\) \(\mathrm{lb} / \mathrm{ft}\). At time \(t=0\), it has a downward velocity of \(2 \mathrm{ft} / \mathrm{sec}\) as...
Study smarter with the SolutionInn App