P6.6 An owner invested $180,000 in a new family-style restaurant, of which$160,000 was immediately used to purchase equipment and $20,000 wasretained for working cash. Estimates for the first year of business are asfollows:Menu selling prices to be established to give a markup of 150% overcost of food soldVariable wages, 28% of sales revenueI Fixed wages, $51,6001 Other variable costs, 7% of sales revenueI Rent, $36,000I Insurance, $4,800Depreciation on equipment, 20%Return on investment desired, 12%Income tax rate, 30%The restaurant has 60 seats and is open 5 days a week for lunch anddinner only. Lunch sales revenue is expected to be 40% of total volumewith 2 seat turnovers. Dinner revenue will be 60% of total volume, with1.25 turnovers.Calculate the average check per meal period that will cover all costs,including desired return on investment.

Working notes: Return on investment ($180,000 x 12%) 21600 total revenue ($180,000 x 112%)…

Answered: P6.6 An owner invested $180,000 in a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Contribution Margin and Contribution Margin Ratio For a recent year, McDonald's Company-owned restaurants had the following sales and expenses (in millions): Sales $40,800 Food and packaging $11,004 Payroll 10,300 Occupancy (rent, depreciation, etc.) 12,376 General, selling, and administrative expenses 5,900 $39,580 Income from operations $1,220 Assume that the variable costs consist of food and packaging, payroll, and 40% of the general, selling, and administrative expenses. a. What is McDonald's contribution margin? Round to the nearest million. (Give answer in millions of dollars.)$________ million b. What is McDonald's contribution margin ratio?________% c. How much would income from operations increase if same-store sales increased by $2,400 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million.$_________ million
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Contribution Margin and Contribution Margin Ratio For a recent year, McDugal's company-owned restaurants had the following sales and expenses (in millions): Sales Food and packaging Payroll Occupancy (rent, depreciation, etc.) General, selling, and admin. expenses Other expense Total expenses Operating income (loss) $4,310 3,800 4,190 2,200 290 % $14,500 (14,790) $(290) Assume that the variable costs consist of food and packaging, payroll, and 40% of the general, a. What is McDonald's contribution margin? Enter your answer in million, rounded to one decimal place. million b. What is McDonald's contribution margin ratio? Round your percentage answer to one decimal place. and nistrative expenses. c. How much would operating income increase if same-store sales increased by $900 million for the coming year, with no change in the contribution margin ratio or fixed costs?
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finance Momo's Muffins sold $30,000,000 of product in a year that had a cost of goods sold of $10,000,000. The average inventory carried by Momo's was $500,000. On average, it takes 35 days for Momo's customers, such as grocery stores and restaurants, to pay on their accounts. Momo's buys ingredients, including flour, spices, and eggs, from its vendors on credit, and Momo's takes about 40 days to pay its suppliers. What is Momo's: Inventory Turnover? Inventory Conversion Period? Cash conversion cycle?
Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows: Amount Percent of Sales Sales $ 86,000 100% Variable expenses 34,400 40% Contribution margin 51,600 60% Fixed expenses 40, 420 Net operating income $ 11,180 Required: 1. What is the company's degree of operating leverage? 2. Using the degree of operating leverage, estimate the impact on net operating income of a 7% increase in unit sales. 3. Construct a new contribution format income statement for the company assuming a 7% increase in unit sales.
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Contribution Margin and Contribution Margin Ratio For a recent year, McDonald's (MCD) company-owned restaurants had the following sales and expenses (in millions): Sales Food and packaging Payroll Occupancy (rent, depreciation, etc.) General, selling, and administrative expenses $18,700 $(7,497) (4,700) (3,243) (2,700) $(18,140) Operating income Assume that the variable costs consist of food and packaging, payroll, and 40% of the general, selling, and administrative expenses. a. What is McDonald's contribution margin? Round to the nearest million. (Give answer in millions of dollars.) million b. What is McDonald's contribution margin ratio? % $560 c. How much would operating income increase if same-store sales increased by $1,100 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million. million
to breakeven? *continuation* show complete solution on paper
Contribution margin and contribution margin ratio For a recent year, McDonald's (MCD) company-owned restaurants had the following sales and expenses (in millions): Sales Food and paper D Payroll and employee benefits Occupancy and other expenses General, selling, and administrative expenses million $19,207.8 $(2,564.2) (2,416.4) (4,357.6) (2,545.6) Operating income Assume that the variable costs consist of food and paper, payroll, 25% of occupancy and other expenses, and 40% of the general, selling, and administrative expenses. a. What is McDonald's contribution margin? Round to the nearest tenth of a million (one decimal place). $(11,883.8) $7,324.0 b. What is McDonald's contribution margin ratio? Round to one decimal place. % million How much would operating income increase if same-store sales lecreased by $800 million for the coming year, with no change in the contribution margin ratio or fixed costs? Re decimal place).
During 2018 a company sells backpacks at $35 each. The contribution margin ratio is 12%. The company broke even this year by selling 300 backpacks What was the company's food cos? O a $1,260 Ob $1,470 Oc $9,240 Od $3,600 Next page

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