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A restaurant has three main products: drinks, meals and desserts. Fixed costs are $397,000. Other financial information is as follows: Item drinks meals desserts Average Purchase (in S) Average Margin 10 25 10 60% 20% 70% Total Sales Dollars (in %) 40 50 10 What are total sales (in dollars) needed to make a profit of $200,000, assuming that the sales mix remains constant? How many drinks would they need to sell in order to make a profit of $200,000, assuming that the sales mix remains constant.

A restaurant has three main products: drinks, meals and desserts. Fixed costs are $397,000. Other financial information is as follows: Item drinks meals desserts Average Purchase (in S) Average Margin 10 25 10 60% 20% 70% Total Sales Dollars (in %) 40 50 10 What are total sales (in dollars) needed to make a profit of $200,000, assuming that the sales mix remains constant? How many drinks would they need to sell in order to make a profit of $200,000, assuming that the sales mix remains constant.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A restaurant has three main products: drinks, meals and desserts. Fixed costs are $397,000. Other financial information is as follows: Item drinks: meals desserts Average Purchase (in S) 10 25 10 Average Margin Total Sales Dollars (in %) 40 50 10 60% 20% 70% What are total sales (in dollars) needed to make a profit of $200,000, assuming that the sales mix remains constant? How many drinks would they need to sell in order to make a profit of $200,000, assuming that the sales mix remains constant.
Transcribed Image Text:A restaurant has three main products: drinks, meals and desserts. Fixed costs are $397,000. Other financial information is as follows: Item drinks: meals desserts Average Purchase (in S) 10 25 10 Average Margin Total Sales Dollars (in %) 40 50 10 60% 20% 70% What are total sales (in dollars) needed to make a profit of $200,000, assuming that the sales mix remains constant? How many drinks would they need to sell in order to make a profit of $200,000, assuming that the sales mix remains constant.
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