PINNI\'S PIZZERIA Pinni\'s Pizzeria is a restaurant selling two types of pizzas:
ID: 2549146 • Letter: P
Question
PINNI'S PIZZERIA Pinni's Pizzeria is a restaurant selling two types of pizzas: thin crust and deep dish. The expected selling price, variable cost and sales volume in units for 2016 are as follows: Thin Crust Deep Dish $12 $6 100,000 150,000 Selling Price per unit Variable Cost per unit Expected Sales (units $8 $4 The total fixed costs for the company are $600,000. They are common to both products. Required 1. Prepare a multi-product budgeted income statement using the contribution margin format. What is the projected operating profit for 2016? How would this prediction change if some of your customers come in groups, e.g., in families, and some family members like only thin crust and others like only deep dish? 2. How would the profit projection change if some customers of Deep Dish pizza decide to switch to Thin Crust pizza?Explanation / Answer
Answer:-
total contribution =1300000
less: total fixed costs=600000
operating profits =700000
let us suppose that 100000 people likes thin crust as well as 100000 people likes deep dish .Now the calculation would be as follows:-
operating profits = contribution -fixed costs
=1000000-600000=400000
particulars thin crust deep dish sales units 100000 150000 selling price 8 12 sales in dollars 800000 1800000 variable costs 400000 900000 contribution 400000 900000 total contribution = 1300000Related Questions
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