During 2023, the Beach Restaurant had sales revenues and food costs of $730,000 and $515,000, respectively. During 2024, Beach plans to introduce anew menu item that is expected to increase sales revenues by $105,000 and food costs by $47,000. Assuming no changes are expected for the otherfood items, operating profits for 2024 are expected to increase by:Mutiple Choice$273.000$105.000$58.000$47.000

Income statement is one of the financial statements that shows profitability, total revenue and…

Answered: During 2023, the Beach Restaurant had…

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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The base case for Grandmother’s Chicken Restaurant (see Example 4.2) is to do nothing. The capacity ofthe kitchen in the base case is 80,000 meals per year. A capacity alternative for Grandmother’s ChickenRestaurant is a two-stage expansion. This alternative expands the kitchen at the end of year 0, raising itscapacity from 80,000 meals per year to that of the dining area (105,000 meals per year). If sales in year 1and 2 live up to expectations, the capacities of both the kitchen and the dining room will be expandedat the end of year 3 to 130,000 meals per year. This upgraded capacity level should suffice up throughyear 5. The initial investment would be $80,000 at the end of year 0 and an additional investment of $170,000 at the end of year 3. The pretax profit is $2 per meal. What are the pretax cash flows for this al-ternative through year 5, compared with the base case?
For April 2021, the actual cost per ASM (available seat mile) for Southwest Airlines was approximately 12.30. This as our best estimate of marginal cost, and assuming the price elasticity of demand is -3.5, find the profit maximizing air fare for Southwest Airline. A. $16.5. B. $17.22 C. $26.5. D. $35.5. E. $45.5.
What is the level of sales needed to obtain a 15% ROI of $8,250,000 for a restaurant and cover all the costs? (Condition: the restaurant has two main products, food and beverage) Food generates 75% of total sales and $3,000,000 in food sales with a 34% food cost. Beverage with a CMR of .80. Tax rate is 18% and fixed costs are $500,000 annually.
Using this information below, answer the following question: What is the Net Income required? Total sales amount to $2,000,000 Food generates 75% of total sales Food cost is $500,000 Beverages generated sales of $300,000 with a CMR of 0.85 The gift store generated the remaining sales at a cost of 30% Tax rate is 27% Annual fixed costs total $1,500,000 Group of answer choices $1,080,000 $1,010,000 $1,000,000 $1,090,000
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A new restaurant is ready to open for business. It is estimated that the food cost (variable cost) will be 64.46% of sales, while fixed cost will be $450,000. The first year’s sales estimates are $1,285,245. Calculate the firm’s operating breakeven level of sales.
Red Hawk, Incorporated, is considering a change in its cash-only sales policy. The new terms of sale would be net one month. The required return is .96 percent per month. Current Policy New Policy Price per unit $ 1,100 $ 1,100 Cost per unit $ 910 $ 910 Unit sales per month 1,160 1,260 Calculate the NPV of the decision to switch. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Typing only. ..
In 2023 , Sandy's Sandwich Shoppe had a capacity of $10,000,000 of sales , actual sales of $6,000,000 , break -even sales of $4,500,000 , fixed costs of $ 1,800,000 , and variable costs of 60% of actual sales What was Sandy's margin of safety expressed in terms of dollars ? $300,000 $ 2,700,000 None of the listed choices are correct $ 1,800,000 $ 1,500,000
In the Coquitlam Grill, the actual food cost in March 2023 was $35,000, and the food sales were $109,375. Management couldn’t control the costs efficiently because of the sharply increased prices on many food items and, as a result, the actual food cost percentage was 2.0% higher than the standard food cost percentage. What were the potential food cost savings in this restaurant in April 2023 in dollars? Show the full calculations.
Dd.6.

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