The Grand Inn is a restaurant in Flagstaff, Arizona. It specializes in southwestern style meals...
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Accounting
The Grand Inn is a restaurant in Flagstaff, Arizona. It specializes in southwestern style meals in a moderate price range. Paul Weld, the manager of Grand, has determined that during the last 2 years the sales mix and contribution margin ratio of its offerings are as follows.
Percent of Total Sales
Contribution Margin Ratio
Appetizers
15
%
60
%
Main entrees
50
%
25
%
Desserts
10
%
70
%
Beverages
25
%
80
%
Paul is considering a variety of options to try to improve the profitability of the restaurant. His goal is to generate a target net income of $112,000. The company has fixed costs of $1,018,050 per year.
(a)
Calculate the total restaurant sales and the sales of each product line that would be necessary to achieve the desired target net income. (Round intermediate calculations to 3 decimal places e.g. 0.251 and final answers to 0 decimal places, e.g. 2,510.)
Total restaurant sales
$
Sales from Each Product
Appetizers
$
Main entrees
$
Desserts
$
Beverages
$
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