Ronald has a Burger Restaurant located near a local University. The restaurant not only sells two types of burgers: Beef Burger and Chicken Burger but also sell Pizza. Information relating to the three products for the next month follows: Expected sales (units) Sales price Variable cost Beef Burger 1,000 £18 £8 Chicken Burger 600 £20 £6 The company has monthly fixed costs of £12,000 and a tax rate of 20%. Pizza 400 £10 £7 Required: a) Compute the company's expected profit (net income) for the upcoming fiscal period. b) Compute the company's sale mix. c) Assuming a consistent sales mix, how many units of each product type must the company sell to break even?

Ronald has a Burger Restaurant located near a local University. The restaurant not only sells two types of burgers: Beef Burger and Chicken Burger but also sell Pizza. Information relating to the three products for the next month follows: Expected sales (units) Sales price Variable cost Beef Burger 1,000 £18 £8 Chicken Burger 600 £20 £6 The company has monthly fixed costs of £12,000 and a tax rate of 20%. Pizza 400 £10 £7 Required: a) Compute the company's expected profit (net income) for the upcoming fiscal period. b) Compute the company's sale mix. c) Assuming a consistent sales mix, how many units of each product type must the company sell to break even?

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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Ronald has a Burger Restaurant located near a local University. The restaurant not only sells two types of burgers: Beef Burger and Chicken Burger but also sell Pizza. Information relating to the three products for the next month follows: Beef Burger Expected sales (units) Sales price Variable cost 1,000 £18 £8 Chicken Burger 600 £20 £6 The company has monthly fixed costs of £12,000 and a tax rate of 20%. Pizza 400 £10 £7 Required: a) Compute the company's expected profit (net income) for the upcoming fiscal period. b) Compute the company's sale mix. c) Assuming a consistent sales mix, how many units of each product type must the company sell to break even?
Tony’s is a Pizzeria located near a local university. The restaurant not only sells two types of pizza: Thin Crust and Deep Dish, but also sells Pasta. Information relating to the three products for the next month follows: Thin Crust Deep Dish Pasta Expected sales (units) 1,000 400 200 Sales price $15 $20 $12 Variable cost $6 $8 $5 The company has monthly fixed costs of $10,000 and a tax rate of 20%. Required: a. Compute the company’s expected profit (net income) for the upcoming fiscal period. b. Compute the company’s sales mix. (Note Solve the normal way c. Assuming a consistent sales mix, how many units of each product type must the company sell to break even? d.Assuming a consistent sales mix, if the company wishes to earn monthly net income of $25,000, how many units of each product type must be sold? e. Compute the margin of safety in both dollar and percentage terms.
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Feedastudent Ltd are developing a Gift food service for students. Market research has indicated that customers would be willing to pay £50 for the product. The company usually expect a profit margin of 10% on products. Fixed costs for marketing and promotion is expected to be £12,000 per year. The company expects orders for 3000 units this year. Food costs are expected to be £41 per unit. Packaging and administration costs are £2 per service. Required: a) Calculate whether Enterprise Ltd can expect to make a profit this year. b) A reduction in the fixed costs of £4,000 could be achieved but this would result in a reduction of expected sales to 2000 per year. Would this reduce the cost gap and be a more profitable solution? Alternatively, cheaper food costing only £38 could be used but this may affect its reputation and…
Noel's barbecue sells chicken and pork barbecue meals. The chicken barbecue meal sells at ₱25, and has variables cost of ₱5. The pork barbecue meals sells ₱36, and has variable cost of ₱12. Currently, Joe sells five chicken barbecue meals for every three pork barbecue meals. Noel has fixed cost ₱107,500 per month. How much each dinner should noel have to sell each month to earn a profit of ₱10,320
Sheridan Dish Printery publishes the best-selling Captain Cajun Cookbook that sells for $7. The company incurs variable costs of $2 per cookbook and total fixed costs are $260,600. If the company's tax rate is 20%, how many cookbooks must be sold to generate $176,000 in net income? cookbooks