Homework Help is Here – Start Your Trial Now!
Business
Accounting
Problem 20 Ose CVP and compute the sales revenue necessary to achieve an IBIT of $162,000 for a multi-product restaurant from the information below. Food Beverage $160,000 48,000 112,000 Total Sales VC CM $240,000 144,000 96,000 $400,000 192,000 208,000 150,000 58,000 100% 48% 52% FC IBIT

Problem 20 Ose CVP and compute the sales revenue necessary to achieve an IBIT of $162,000 for a multi-product restaurant from the information below. Food Beverage $160,000 48,000 112,000 Total Sales VC CM $240,000 144,000 96,000 $400,000 192,000 208,000 150,000 58,000 100% 48% 52% FC IBIT

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

See image 

**Problem 20** Use Cost-Volume-Profit (CVP) analysis and compute the sales revenue necessary to achieve an Income Before Income Taxes (IBIT) of $162,000 for a multi-product restaurant from the information below. | | Food | Beverage | Total | | |-----------------|------------|------------|-----------|-----| | **Sales** | $240,000 | $160,000 | $400,000 | 100%| | **Variable Costs (VC)** | 144,000 | 48,000 | 192,000 | 48% | | **Contribution Margin (CM)** | 96,000 | 112,000 | 208,000 | 52% | | **Fixed Costs (FC)** | | | 150,000 | | | **Income Before Income Taxes (IBIT)**| | | 58,000 | | **Explanation:** This table outlines the financial components needed to perform a CVP analysis for a restaurant with both food and beverage sales. - **Sales** represent the total revenue from each category. - **Variable Costs (VC)** are the costs that vary with the level of output. - **Contribution Margin (CM)** is the amount left after variable costs are subtracted from sales, contributing to covering fixed costs and generating profit. - **Fixed Costs (FC)** are costs that do not change with the level of output. - **Income Before Income Taxes (IBIT)** represents the profit before taxes. The problem asks to compute the necessary sales to achieve a target IBIT of $162,000, considering the current breakdown of costs and sales.
Transcribed Image Text:**Problem 20** Use Cost-Volume-Profit (CVP) analysis and compute the sales revenue necessary to achieve an Income Before Income Taxes (IBIT) of $162,000 for a multi-product restaurant from the information below. | | Food | Beverage | Total | | |-----------------|------------|------------|-----------|-----| | **Sales** | $240,000 | $160,000 | $400,000 | 100%| | **Variable Costs (VC)** | 144,000 | 48,000 | 192,000 | 48% | | **Contribution Margin (CM)** | 96,000 | 112,000 | 208,000 | 52% | | **Fixed Costs (FC)** | | | 150,000 | | | **Income Before Income Taxes (IBIT)**| | | 58,000 | | **Explanation:** This table outlines the financial components needed to perform a CVP analysis for a restaurant with both food and beverage sales. - **Sales** represent the total revenue from each category. - **Variable Costs (VC)** are the costs that vary with the level of output. - **Contribution Margin (CM)** is the amount left after variable costs are subtracted from sales, contributing to covering fixed costs and generating profit. - **Fixed Costs (FC)** are costs that do not change with the level of output. - **Income Before Income Taxes (IBIT)** represents the profit before taxes. The problem asks to compute the necessary sales to achieve a target IBIT of $162,000, considering the current breakdown of costs and sales.
Expert Solution
steps

Step by step

Solved in 4 steps with 4 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Database design
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
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