Question:
A restaurant has a café and bar operation. The café provides 65 percent of total revenue with a 48 percent variable cost. The bar provides 35 percent of total revenue with a 38 percent variable cost. Answer the following:
a. What is the contribution margin of the café?
b. What is the contribution margin of the bar?
c. What is the combined contribution margin of the café and bar?
d. Assume the owner wants operating income to increase by $50,000, with the increase being provided jointly by the café and bar. What is the additional sales revenue required?