manager of a dessert cafe wants to determine the necessary volume of sales dollars next month to bre selling price per unit, and the percentage revenue for each category. Category esserts quor offee Cost per/Unit $3.3 $3.6 $0.8 Selling Price/Unit Percentage Revenue $3.8 $6.8 $3.7 fixed cost for running the cafe (that is, rent, utilities, etc.) is $25000 per month. at is the profit margin for Liquor? 37 18 51 31 0.47 Specify as a number with two decimal digits by rounding. at is the break-even point in dollars per month? 351 43X Specify as a whole number by rounding. 49343
manager of a dessert cafe wants to determine the necessary volume of sales dollars next month to bre selling price per unit, and the percentage revenue for each category. Category esserts quor offee Cost per/Unit $3.3 $3.6 $0.8 Selling Price/Unit Percentage Revenue $3.8 $6.8 $3.7 fixed cost for running the cafe (that is, rent, utilities, etc.) is $25000 per month. at is the profit margin for Liquor? 37 18 51 31 0.47 Specify as a number with two decimal digits by rounding. at is the break-even point in dollars per month? 351 43X Specify as a whole number by rounding. 49343
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Answer(s): (Your response(s) are shown below, followed by the correct answer(s).)
The manager of a dessert cafe wants to determine the necessary volume of sales dollars next month to break-even. There are three sales categories: desserts, liquor, coffee. The following table gives estimates the cost per unit,
he selling price per unit, and the percentage revenue for each category.
Category
Desserts
Liquor
Coffee
49351
Cost per/Unit
$3.3
$3.6
$0.8
What is the break-even point in dollars per month?
₂X
Feedback:
Selling Price/Unit
$3.8
$6.8
$3.7
The fixed cost for running the cafe (that is, rent, utilities, etc.) is $25000 per month.
What is the profit margin for Liquor?
✓
0.47
0.47
Specify as a number with two decimal digits by rounding.
49343
Percentage Revenue
Specify as a whole number by rounding.
18
51
31
Expert Solution
Step 1: Profit margin and break even point in dollars.
Profit margin is the amount company makes after deducting the costs.
It can be calculated by;
Profit margin = profit margin / sales * 100.
profit margin = sales - costs.
break-even point in dollars is the point where company recovers all the variable and fixed costs. It is the where point there is no profit no loss.
Sales mix means the company produces more than one product with common fixed cost.
So, break-even point in dollar amount( sales mix) can be calculated by;
= fixed cost / weighted average contribution margin ratio.
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