Can you please solve problem 24. Required 1-3 with a detailed explanation? Thank
ID: 2460052 • Letter: C
Question
Can you please solve problem 24. Required 1-3 with a detailed explanation? Thank you!
Compute the NI's breakeven point. 4. If the NI wants to make $1, 500, 000, what must its room sales equal? Lori Bogar owns a restaurant with an extensive gift shop. The condensed annual income statment for Bogar's Cafe'(BC) is as follows: Required: 1. Compute BC's weighted average CMR. 2. Compute BC's breakeven point. 3. Compute the total revenue sales required to yield a cash flow of $500, 000. Assume that the mortgage payable will be reduced with cash payments totaling $200, 000, and that new equipment costing $150, 000 will be purchased using cash.Explanation / Answer
Total sales revenue=revenue from food+ revenue from Gift shop
=$2,000,000+$1,000,000=$3,000,000
Total variable cost=800000+600,000=1,400,000
(Sales-variable cost)/sales=($3,000,000-1,400,000)/3000,000=0.533 or 53.33%
Total fixed cost:
200,000+100,000+800,000+200000=1,300,000
Fixed cost/contribution margin ratio=1300,000/53.33=24,37,652.40
Desired profit=500,000
Required total sales for achieving profit of 500,000
(1,050,000+500,000)/53.33%=2,906,432