Segment data for Felicia’s Fast Food Restaurants for the current year appears below:   Cajun   Japanese   Brazilian   Total Sales $60,000   $100,000   $40,000   $200,000 Cost of goods sold 36,000   65,000   20,000   121,000 Contribution margin 24,000   35,000   20,000   79,000 Manager salaries 18,000   21,000   8,000   47,000 Rent 2,000   1,000   3,000   6,000 Segment margin $4,000   $13,000   $9.000   $26,000 Common fixed costs 7,000   7,000   7,000   21,000 Profit $ (3,000)   $   6,000   $  2,000   $   5,000 Managers salaries and rent for the particular restaurant will not continue if closed. If the Cajun restaurant is closed, what would be the effect on total company profits?

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Segment data for Felicia’s Fast Food Restaurants for the current year appears below:

  Cajun   Japanese   Brazilian   Total
Sales $60,000   $100,000   $40,000   $200,000
Cost of goods sold 36,000   65,000   20,000   121,000
Contribution margin 24,000   35,000   20,000   79,000
Manager salaries 18,000   21,000   8,000   47,000
Rent 2,000   1,000   3,000   6,000
Segment margin $4,000   $13,000   $9.000   $26,000
Common fixed costs 7,000   7,000   7,000   21,000
Profit $ (3,000)   $   6,000   $  2,000   $   5,000

Managers salaries and rent for the particular restaurant will not continue if closed. If the Cajun restaurant is closed, what would be the effect on total company profits?

 

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