**Problem 21**Use CVP (Cost-Volume-Profit analysis) to compute the sales revenue necessary to achieve an IBIT (Income Before Income Taxes) of $120,000 for a multi-product restaurant with total fixed costs of $150,000 from the information below:| | Sales Mix | Contribution Margin ||-----------|-----------|----------------------|| **Food** | 60% | 40% || **Beverage** | 40% | 70% |The data presents the sales mix and contribution margin for two product categories: Food and Beverage. The Food category makes up 60% of sales and has a 40% contribution margin, while Beverages account for 40% of sales with a 70% contribution margin. The task is to calculate the required sales revenue to meet a specified income and fixed cost threshold.

It dpicts the effect of changes in the cost of the profit of the business.

Problem 21 same les 361 Use CVP and compute the sales revenue necessary to achieve an IBIT of $162.000 for a multi-product restaurant with total fixed costs of $150,000 from the information below: Sales Contribution Mix Margin 60% 40% Food 40% 70% Beverage

Problem 21 same les 361 Use CVP and compute the sales revenue necessary to achieve an IBIT of $162.000 for a multi-product restaurant with total fixed costs of $150,000 from the information below: Sales Contribution Mix Margin 60% 40% Food 40% 70% Beverage

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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Concept explainers

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.

Question

**Problem 21**

Use CVP (Cost-Volume-Profit analysis) to compute the sales revenue necessary to achieve an IBIT (Income Before Income Taxes) of $120,000 for a multi-product restaurant with total fixed costs of $150,000 from the information below:

| | Sales Mix | Contribution Margin |
|-----------|-----------|----------------------|
| **Food** | 60% | 40% |
| **Beverage** | 40% | 70% |

The data presents the sales mix and contribution margin for two product categories: Food and Beverage. The Food category makes up 60% of sales and has a 40% contribution margin, while Beverages account for 40% of sales with a 70% contribution margin. The task is to calculate the required sales revenue to meet a specified income and fixed cost threshold.

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