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Paul believes the restaurant could greatly improve its profitability by reducing the complexity and selling...

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Accounting

Paul believes the restaurant could greatly improve its profitability by reducing the complexity and selling price of its entrees to increase the number of clients that it serves. It would then more heavily market its appetizers and beverages. He is proposing to reduce the contribution margin ratio on the main entrees to 10% by dropping the average selling price. He envisions an expansion of the restaurant that would increase fixed costs by $584,400. At the same time, I is proposing to change the sales

mix to the following.

Percent of Total Sales

25 %

25

10 %

40 %

Contribution Margin Ratio

70 %

10 %

80 %

80 %

Appetizers

Main entrees)

Desserts

Beverages

Compute 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. 10.251 and final answers to O decimal places, e.g. 2.510.)

Total restaurant sales

$

Sales from Each Product

Appetizers

$

Main entrees

$

Desserts

$

Beverages

$

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