P6 please help..... Paul believes the restaurant could greatly improve its profitability by reducing the complexity and selling price of its entrees to increase the number ofclients that it serves. It would then more heavily market its appetizers and beverages. He is proposing to reduce the contribution margin ratio on themain entrees to 10% by dropping the average selling price. He envisions an expansion of the restaurant that would increase fixed costs by $585,000.At the same time, he is proposing to change the sales mix to the following.Percent ofTotal SalesContributionMargin RatioAppetizers25%70%Main entrees25 %10 %Desserts10 %Beverages40 %80 %80 %Compute the total restaurant sales, and the sales of each product line that would be necessary to achieve the desired target net income. (Roundintermediate calculations to 3 decimal places e.g. 10.251 and final answers to 0 decimal places, e.g. 2,510.)Total restaurant salesAppetizersMain entreesDessertsBeverages$Sales from Each Product

1. Contribution Margin Ratio for Each Product:- Appetizers: 70%- Main entrees: 10%- Desserts: 80%-…

Answered: Paul believes the restaurant could…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 5PA: Kylies Cookies is considering the purchase of a larger oven that will cost $2,200 and will increase...

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Hudson Corporation is considering three options for managing its data warehouse: continuing with its own staff, hiring an outside vendor to do the managing, or using a combination of its own staff and an outside vendor. The cost of the operation depends on future demand. The annual cost of each option (in thousands of dollars) depends on demand as follows: If the demand probabilities are 0.2, 0.5, and 0.3, which decision alternative will minimize the expected cost of the data warehouse? What is the expected annual cost associated with that recommendation? Construct a risk profile for the optimal decision in part (a). What is the probability of the cost exceeding $700,000?
Kylies Cookies is considering the purchase of a larger oven that will cost $2,200 and will increase her fixed costs by $59. What would happen if she purchased the new oven to realize the variable cost savings of $0.10 per cookie, and what would happen if she raised her price by just $0.20? She feels confident that such a small price increase will decrease the sales by only 25 units and may help her offset the increase in fixed costs. Given the following current prices how would the break-even in units and dollars change if she doesnt increase the selling price and if she does increase the selling price? Complete the monthly contribution margin income statement for each of these cases.
How much will profit decrease by?
Meyerson’s Bakery is considering the addition of a new line of pies to its product offerings. However, the following scenarios could be faced by this Bakery for the new line: First scenario: It is expected that each pie will sell for $17 and the variable costs per pie will be $11. Total fixed operating costs are expected to be $25,000. Meyerson’s faces a marginal tax rate of 25%, will have interest expense associated with this line of $3,500, and expects to sell about 4,500 pies in the first year. Second scenario: It is expected that each pie will sell for $15 and the variable costs per pie will be $9. Total fixed operating costs are expected to be $20,000. Meyerson’s faces a marginal tax rate of 35%, will have interest expense associated with this line of $3,000, and expects to sell about 4,000 pies in the first year. 1. Under the first scenario, How many pies would Meyerson’s need to sell in order to achieve EBIT of $20,000? (EBIT = Earnings Before Interest and Taxes).…
Ashley’s company is looking to add two new printers that will increase fixed costs by $75,000. The variable costs are $50 per order. The two new printers allow the business to increase their orders by 5000 annually. How many orders would have to be added to justify buying these new printers, vs not making any changes and continuing as they are? What other considerations might you consider in whether or not to make this purchase or not?
Chan’s Spring Roll (CSR), a seller of frozen spring roll, is considering introducing a healthier version of its product that will be low in sugar and gluten-free. The firm expects that sales of the new spring roll will be $20 million per year. While many of these sales will be to new customers, CSR estimates that 50% will come from customers who switch to the new, healthier spring roll instead of buying the original version. Suppose that 25% of the customers who would switch from CSR’s original spring roll to its healthier version will switch to another brand if CSR does not introduce a healthier spring roll. What level of incremental sales is associated with introducing the new spring roll in this case? $15 million $10 million $17.5 million $12.5 million
CT Corp. is considering a project that has an up-front cost at t = 0 of P24,000. The project’s subsequent cash flows are critically dependent on whether a competitor’s product is approved by the Food and Drug Administration. If the FDA rejects the competitive product, Mano's product will have high sales and cash flows, but if the competitive product is approved, that will negatively impact Mano. There is a 75% chance that the competitive product will be rejected, in which case Mano's expected cash flows will be P8,000 at the end of each of the next seven years (t = 1 to 7). There is a 25% chance that the competitor’s product will be approved, in which case the expected cash flows will be only P600 at the end of each of the next seven years (t = 1 to 7). Mano will know for sure one year from today whether the competitor’s product has been approved. CT Corp. is considering whether to make the investment today or to wait a year to find out about the FDA’s decision. If it waits a year,…
How would I do this problem?
Salam is thinking about opening a lunchtime restaurant on a busy street. Salam estimates that all the restaurants on this street together serve 21,918 lunches on a typical day. Opening the new lunchtime restaurant will require $6,207 in fixed costs. Salam believes that he can earn a margin of $4.10 on each lunch his new restaurant serves. Calculate breakeven MARKET SHARE for Salam's new restaurant. Report your answer as a percent. Report 25.5%, for example, as "25.5". Rounding: tenth of a percent.

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