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Required: a-1. Prepare an Income statement for dinner service only. a-2. Based on the financial Impact, should Brian open the bistro for lunch? Complete this question by entering your answers in the tabs below. Reg A1 Prepare an income statement for dinner service only. Note: Round your intermediate calculations and final answers to nearest whole dollar. Sales revenue Costs Food costs Labor Rent Utilities Other costs Req A2 Manager's salary Langholm Bistro Annual Income Statement Lunch and Dinner Service $ Total costs Operating profit (loss) $ $ 784,000 250,000 249,000 72,000 57,000 Dinner Service Only 41,120 78,000 756,120 $ 27,880 b. Are there other factors he should consider? Note: You may select more than one answer. Single click the box with the question mark to produce a check m answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left will be automatically graded as incorrect. whether this will lead to customers switching from dinner to lunch. 7 what other restaurants might do. 7 whether the longer opening hours might cause the restaurant to lose some of its appeal. 7 whether this will lead to enhancement of storage facilities. Whether the longer opening hours might cause the restaurant to recrult additional staff.

Required: a-1. Prepare an Income statement for dinner service only. a-2. Based on the financial Impact, should Brian open the bistro for lunch? Complete this question by entering your answers in the tabs below. Reg A1 Prepare an income statement for dinner service only. Note: Round your intermediate calculations and final answers to nearest whole dollar. Sales revenue Costs Food costs Labor Rent Utilities Other costs Req A2 Manager's salary Langholm Bistro Annual Income Statement Lunch and Dinner Service $ Total costs Operating profit (loss) $ $ 784,000 250,000 249,000 72,000 57,000 Dinner Service Only 41,120 78,000 756,120 $ 27,880 b. Are there other factors he should consider? Note: You may select more than one answer. Single click the box with the question mark to produce a check m answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left will be automatically graded as incorrect. whether this will lead to customers switching from dinner to lunch. 7 what other restaurants might do. 7 whether the longer opening hours might cause the restaurant to lose some of its appeal. 7 whether this will lead to enhancement of storage facilities. Whether the longer opening hours might cause the restaurant to recrult additional staff.

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter18: Pricing And Profitability Analysis
Section: Chapter Questions
Problem 10E
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Problem 1-47 (Algo) Cost Data for Managerial Purposes (LO 1-3) Langholm Bistro is a popular restaurant in a small, coastal village. Brian Langholm, who opened the restaurant five years ago, has seen It grow steadily. Currently, Langholm's is only open for dinner, but many of the regular customers have been asking Brian to consider opening for lunch as well. Brian has been talking to his accountant about the financial Impact of the expanded services on the overall business. He knew that the bistro did not make much money and he was concerned that the new business might be too risky. The accountant asked Brian for his best estimates of the impact of the new business on revenues and costs. He had been thinking about this for some time and estimated that revenues would grow by about 25 percent. Food costs would increase by about 40 percent and labor costs by about 25 percent. Rent on the bistro would not change, but utilities would increase by about 20 percent. Other costs would increase by 10 percent. The salary Brian pays himself as manager of the bistro would not change. A few days later, Brian's accountant stops by with the following estimated Income statement assuming Brian adds the lunch business. Required: a-1. Prepare an Income statement for dinner service only. a-2. Based on the financial impact, should Brian open the bistro for lunch? Complete this question by entering your answers in the tabs below. Req A1 Prepare an income statement for dinner service only. Note: Round your intermediate calculations and final answers to nearest whole dollar. Sales revenue Costs Food costs Labor Rent Utilities Other costs Req A2 Manager's salary Langholm Bistro Annual Income Statement Lunch and Dinner Service $ 784,000 Total costs Operating profit (loss) $ $ 259,000 249,000 72,000 57,000 Dinner Service Only 41,120 78,000 756,120 $ 27,880 < Req A1 0 Req A2 > b. Are there other factors he should consider? Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect. whether this will lead to customers switching from dinner to lunch. ? What other restaurants might do. ? Whether the longer opening hours might cause the restaurant to lose some of its appeal. Whether this will lead to enhancement of storage facilities. ? Whether the longer opening hours might cause the restaurant to recrult additional staff.
Transcribed Image Text:Problem 1-47 (Algo) Cost Data for Managerial Purposes (LO 1-3) Langholm Bistro is a popular restaurant in a small, coastal village. Brian Langholm, who opened the restaurant five years ago, has seen It grow steadily. Currently, Langholm's is only open for dinner, but many of the regular customers have been asking Brian to consider opening for lunch as well. Brian has been talking to his accountant about the financial Impact of the expanded services on the overall business. He knew that the bistro did not make much money and he was concerned that the new business might be too risky. The accountant asked Brian for his best estimates of the impact of the new business on revenues and costs. He had been thinking about this for some time and estimated that revenues would grow by about 25 percent. Food costs would increase by about 40 percent and labor costs by about 25 percent. Rent on the bistro would not change, but utilities would increase by about 20 percent. Other costs would increase by 10 percent. The salary Brian pays himself as manager of the bistro would not change. A few days later, Brian's accountant stops by with the following estimated Income statement assuming Brian adds the lunch business. Required: a-1. Prepare an Income statement for dinner service only. a-2. Based on the financial impact, should Brian open the bistro for lunch? Complete this question by entering your answers in the tabs below. Req A1 Prepare an income statement for dinner service only. Note: Round your intermediate calculations and final answers to nearest whole dollar. Sales revenue Costs Food costs Labor Rent Utilities Other costs Req A2 Manager's salary Langholm Bistro Annual Income Statement Lunch and Dinner Service $ 784,000 Total costs Operating profit (loss) $ $ 259,000 249,000 72,000 57,000 Dinner Service Only 41,120 78,000 756,120 $ 27,880 < Req A1 0 Req A2 > b. Are there other factors he should consider? Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect. whether this will lead to customers switching from dinner to lunch. ? What other restaurants might do. ? Whether the longer opening hours might cause the restaurant to lose some of its appeal. Whether this will lead to enhancement of storage facilities. ? Whether the longer opening hours might cause the restaurant to recrult additional staff.
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