The Grand Inn is a restaurant in Flagstaff, Arizona. It specializes in southwestern style meals in a moderate price range. Paul Weld, themanager of Grand, has determined that during the last 2 years the sales mix and contribution margin ratio of its offerings are asfollows. Sales mix is determined using total sales dollars.AppetizersMain entreesDessertsBeverages(a)AppetizersPercent ofTotal SalesMain entrees15 %Your answer is correct.Desserts50 %Beverages10 %Total restaurant sales $25 %Paul is considering a variety of options to try to improve the profitability of the restaurant. His goal is to generate a target net incomeof $117,000. The company has fixed costs of $1,053,000 per year.SolutionCalculate the total restaurant sales and the sales of each product line that would be necessary to achieve the desired target netincome. (Round intermediate calculations to 3 decimal places e.g. 0.251 and final answers to O decimal places, e.g. 2,510.)$$ContributionMargin Ratio$50 %$eTextbook and Media25 %50 %Sales from Each Product80 %39000013000002600002600000650000Attempts: 2 of 3 used

Contribution margin is a critical measure of financial performance that helps businesses to measure…

Answered: vs. Sales mix is determined using total…

vs. Sales mix is determined using total sales dollars. etizers entrees serts erages Percent of Total Sales 15 % 50 % 10 % 25 % Contribution Margin Ratio 50 % 25 % 50 % 80 %

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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ебоок Break-even sales and cost-volume-profit chart For the coming year, Cleves Company anticipates a unit selling price of $134, a unit variable cost of $67, and fixed costs of $629,800. Required: 1. Compute the anticipated break-even sales (units). units 2. Compute the sales (units) required to realize a target profit of $341,700. units 3. Construct a cost-volume-profit chart on paper, assuming maximum sales of 18,800 units within the relevant range. From your chart, indicate whether each of following sales levels would produce a profit, a loss, or break-even. $1,768,800 $1,581,200 $1,259,600 $951,400 $750,400 4. Determine the probable operating income (loss) if sales total 15,000 units. If required, use the minus sign to indicate a loss.
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