Question: Pizza Land operates a pizza franchise in LA. The owner has provided the following budgeted data for next year. Revenue $11,838,000 Fixed Costs $3,198,000 Variable
Pizza Land operates a pizza franchise in LA. The owner has provided the following budgeted data for next year.
| Revenue | $11,838,000 |
| Fixed Costs | $3,198,000 |
| Variable Costs (depends on the # of pizzas sold) | $7,309,000 |
For each of the following scenarios, determine the dollar impact on Pizza Land. Consider each scenario independently. Do not enter dollar signs or commas in the input boxes. Round all answers to the nearest whole number. Enter all values as positive values. Do not use the negative sign. i. A 5% increase in fixed costs.
| Revenue: | Answer Decrease byIncrease b yNo change | $Answer |
| Variable Costs: | AnswerDecrease byIncrease byNo change | $Answer |
| Fixed Costs: | AnswerDecrease byIncrease byNo change | $Answer |
| Contribution Margin: | AnswerDecrease byIncrease byNo change | $Answer |
| Budgeted Operating Income: | AnswerDecrease byIncrease byNo change | $Answer |
ii. A 13% increase in contribution margin, but holding revenue constant.
| Revenue: | AnswerDecrease byIncrease byNo change | $Answer |
| Variable Costs: | AnswerDecrease byIncrease byNo change | $Answer |
| Fixed Costs: | AnswerDecrease byIncrease byNo change | $Answer |
| Contribution Margin: | AnswerDecrease byIncrease byNo change | $Answer |
| Budgeted Operating Income: | AnswerDecrease byIncrease byNo change | $Answer |
iii. A 15% increase in fixed costs and 14% increase in units sold.
| Revenue: | AnswerDecrease byIncrease byNo change | $Answer |
| Variable Costs: | AnswerDecrease byIncrease byNo change | $Answer |
| Fixed Costs: | AnswerDecrease byIncrease byNo change | $Answer |
| Contribution Margin: | AnswerDecrease byIncrease byNo change | $Answer |
| Budgeted Operating Income: | AnswerDecrease byIncrease byNo change | $Answer |
Step by Step Solution
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To determine the dollar impact on Pizza Land for each given scenario we need to perform the following calculations stepbystep Scenario i A 5 increase in fixed costs 1 Calculate the new fixed costs Ori... View full answer
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