Brewpubs provide two products to customers: food from the restaurant segment, and freshly brewed beer from the beer prod

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Brewpubs Provide Two Products To Customers Food From The Restaurant Segment And Freshly Brewed Beer From The Beer Prod 1 (52.55 KiB) Viewed 59 times

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Brewpubs provide two products to customers: food from the restaurant segment, and freshly brewed beer from the beer production segment. Both segments are typically in the same building, which allows customers to see the beer brewing process After months of research, the three entrepreneurs created a financial model that showed the following projections for the first year of operations Terra Food Other SU Varatecas Cotos Berbe fonds Order பான்னடிக்கை பாரியல the credit card 12 How Contibution mag 30 . Sales managed end One dag, men wand Property Depart Deler நேயரமான் 2.000 50 000 Required: Round your answers to the nearest hundredth of a percent and nearest dollar where appropriate. (An example for percentage calculations is 0.434532 - 0.4345 = 43.45 percent; an example for dollar calculations is $378.9787 = $379.) a. What were potential investors and financial institutions concerned about when asking the questions listed previously? b. Why was the first financial model inappropriate for answering most of the questions asked by investors and bankers? Be specific c. Suppose you are deciding whether to invest in RBC. Which financial ratio would you use to check the reasonableness of RBC's projected operating profit as compared with that of similar businesses? d. Why is it difficult to answer the question "How much does a pint of beer cost to produce?" Which costs would you include in answering this question? e. Perform CVP analysis by answering the following questions: 1. What is the break-even point in sales dollars for RBC? 2. What is the margin of safety in sales dollars for RBC? 3. Why is it not possible for RBC to find the break-even point in units? 4. What sales dollars would be required to achieve an operating profit of $200,000 and of $500,000? What assumptions are made in these calculations? 1. Assume total revenue remains the same, but the product mix changes so that each of the three revenue categories is weighted as follows: food 70 percent, beer 25 percent, other 5 percent. Prepare a contribution margin income statement to reflect these changes. How will this shift in product mix affect operating profit? 3. Although the financial model is important, what other strategic factors should RBC and its investors consider?
Cocos Brewpubs provide two products to customers: food from the restaurant segment, and freshly brewed beer from the beer production segment. Both segments are typically in the same building, which allows customers to see the beer brewing process After months of research, the three entrepreneurs created a financial model that showed the following projections for the first year of operations: Sales de molt Food Other . Varatecas Beer of Food Other Wempy பேட்டரலாம் பாரிய Other Vocal Contribute 300 Fed.com Seneca மோரா மாlaiary A the changin wand Deprecat MO Dette பொடியார் 2 0.00 Property 4.000 Tocalhost 500 Required Round your answers to the nearest hundredth of a percent and nearest dollar where appropriate. (An example for percentage calculations is 0.434532 0.4345 = 43.45 percent; an example for dollar calculations is $378.9787 = $379.) a. What were potential investors and financial institutions concerned about when asking the questions listed previously? b. Why was the first financial model inappropriate for answering most of the questions asked by investors and bankers? Be specific c. Suppose you are deciding whether to invest in RBC. Which financial ratio would you use to check the reasonableness of RBC's projected operating profit as compared with that of similar businesses? d. Why is it difficult to answer the question "How much does a pint of beer cost to produce?" Which costs would you include in answering this question? e. Perform CVP analysis by answering the following questions: 1. What is the break-even point in sales dollars for RBC? 2. What is the margin of safety in sales dollars for RBC? 3. Why is it not possible for RBC to find the break-even point in units? 4. What sales dollars would be required to achieve an operating profit of $200,000 and of $500,000? What assumptions are made in these calculations? 1. Assume total revenue remains the same, but the product mix changes so that each of the three revenue categories is weighted as follows: food 70 percent, beer 25 percent, other 5 percent. Prepare a contribution margin income statement to reflect these changes. How will this shift in product mix affect operating profit? g. Although the financial model is important, what other strategic factors should RBC and its investors consider?