Last year a local restaurant realized sales of $300,000 with fixed costs of $110,000 and total variable costs of $70,000. 1. What was the restaurants contribution rate (as a decimal) last year? 2. If the restaurant has the same contribution rate this year, what net income can be expected this year from a revenue of $180,000? 3. If the restaurant has the same fixed and variable costs this year, what sales this year will result in a profit of $29,000? 4. Suppose that the fixed costs this year rise to $130,000 and the variable costs remain the same. What is break-even revenue?
Last year a local restaurant realized sales of $300,000 with fixed costs of $110,000 and total variable costs of $70,000. 1. What was the restaurants contribution rate (as a decimal) last year? 2. If the restaurant has the same contribution rate this year, what net income can be expected this year from a revenue of $180,000? 3. If the restaurant has the same fixed and variable costs this year, what sales this year will result in a profit of $29,000? 4. Suppose that the fixed costs this year rise to $130,000 and the variable costs remain the same. What is break-even revenue?
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter6: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 10E: Contribution margin and contribution margin ratio For a recent year, McDonalds (MCD) company-owned...
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Last year a local restaurant realized sales of $300,000 with fixed costs of $110,000 and total variable costs of $70,000.
1. What was the restaurants contribution rate (as a decimal) last year?
2. If the restaurant has the same contribution rate this year, what net income can be expected this year from a revenue of $180,000?
3. If the restaurant has the same fixed and variable costs this year, what sales this year will result in a profit of $29,000?
4. Suppose that the fixed costs this year rise to $130,000 and the variable costs remain the same. What is break-even revenue?
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