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Make a contribution format income statement

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Question - The Bridal Palace in Stepford, GA has three distinct segments:

The Main Room Restaurant has departmental operating leverage of 2.6, annual revenues of $8,400,000 and net operating income of $2,100,000

The Sophisticates Lounge, a high-end restaurant, has annual revenues of $4,500,000, fixed costs of $775,000 and a variable cost ratio of 40%

The banquets and functions department has a margin of safety percentage of 30%, fixed costs of $2,550,000, and a contribution margin ratio of 45%

Required - Please answer the following questions, showing all work in order to receive credit:

1. Make a contribution format income statement for the Café Escadrille, including contribution margin and net operating income for each department and for the Café in total.

2. What is the break-even point in total sales dollars for the Café?

3. What is the breakeven point for the Sophisticiates Lounge?

4. Assuming a 25% tax rate, what level of sales is required for the Café to earn an after-tax net income of $1,500,000.

Reference no: EM132939328

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