Homework Help is Here – Start Your Trial Now!
Business
Accounting
Café Tropical is a local restaurant specializing in tropical cuisine. Among its various Hawaiian-themed menu item is the popular "Surprise-Me-Smoothie." The smoothies are sold to regular customers at a price of $6.50 per smoothie. The café typically sells 40 smoothies during breakfast. At this quantity, the smoothies cost the café $2.50 each to make - $2.00 of the cost is variable and $0.50 of the cost is fixed. The restaurant is currently operating at 80% capacity during the breakfast hour. The only menu item offered during breakfast is the smoothie. The café is considering accepting a special catering order for their "Surprise-Me- Smoothie" from the Jazzagals before they depart for their a cappella competition. The Jazzagals will need the smoothies ready for breakfast, one of the café's busiest times. The Jazzagals need 30 smoothies and would like a discounted price of $4.50 per smoothie because of the quantity. What will be the effect on operating income if Café Tropical accepts the special- order? Increase of $25 Increase of $15 Decrease of $15 Increase of $75 Decrease of $20

Café Tropical is a local restaurant specializing in tropical cuisine. Among its various Hawaiian-themed menu item is the popular "Surprise-Me-Smoothie." The smoothies are sold to regular customers at a price of $6.50 per smoothie. The café typically sells 40 smoothies during breakfast. At this quantity, the smoothies cost the café $2.50 each to make - $2.00 of the cost is variable and $0.50 of the cost is fixed. The restaurant is currently operating at 80% capacity during the breakfast hour. The only menu item offered during breakfast is the smoothie. The café is considering accepting a special catering order for their "Surprise-Me- Smoothie" from the Jazzagals before they depart for their a cappella competition. The Jazzagals will need the smoothies ready for breakfast, one of the café's busiest times. The Jazzagals need 30 smoothies and would like a discounted price of $4.50 per smoothie because of the quantity. What will be the effect on operating income if Café Tropical accepts the special- order? Increase of $25 Increase of $15 Decrease of $15 Increase of $75 Decrease of $20

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

sas.3

 

Café Tropical is a local restaurant specializing in tropical cuisine. Among its various Hawaiian-themed menu item is the popular "Surprise-Me-Smoothie." The smoothies are sold to regular customers at a price of $6.50 per smoothie. The café typically sells 40 smoothies during breakfast. At this quantity, the smoothies cost the café $2.50 each to make - $2.00 of the cost is variable and $0.50 of the cost is fixed. The restaurant is currently operating at 80% capacity during the breakfast hour. The only menu item offered during breakfast is the smoothie. The café is considering accepting a special catering order for their "Surprise-Me- Smoothie" from the Jazzagals before they depart for their a cappella competition. The Jazzagals will need the smoothies ready for breakfast, one of the café's busiest times. The Jazzagals need 30 smoothies and would like a discounted price of $4.50 per smoothie because of the quantity. What will be the effect on operating income if Café Tropical accepts the special- order? Increase of $25 Increase of $15 Decrease of $15 Increase of $75 Decrease of $20
Transcribed Image Text:Café Tropical is a local restaurant specializing in tropical cuisine. Among its various Hawaiian-themed menu item is the popular "Surprise-Me-Smoothie." The smoothies are sold to regular customers at a price of $6.50 per smoothie. The café typically sells 40 smoothies during breakfast. At this quantity, the smoothies cost the café $2.50 each to make - $2.00 of the cost is variable and $0.50 of the cost is fixed. The restaurant is currently operating at 80% capacity during the breakfast hour. The only menu item offered during breakfast is the smoothie. The café is considering accepting a special catering order for their "Surprise-Me- Smoothie" from the Jazzagals before they depart for their a cappella competition. The Jazzagals will need the smoothies ready for breakfast, one of the café's busiest times. The Jazzagals need 30 smoothies and would like a discounted price of $4.50 per smoothie because of the quantity. What will be the effect on operating income if Café Tropical accepts the special- order? Increase of $25 Increase of $15 Decrease of $15 Increase of $75 Decrease of $20
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS