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I-24.01 Problem

I-24.01 Problem - I-24.01 Contribution margin 400 000 $...

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Unformatted text preview: I-24.01 Contribution margin 400 000 $ Pop-In Burgers owns numerous restaurants and food production facilities. The company routinely evaluates proposals to drive operational efficiency. Four such proposals are currently under review. One entails the suggestion to close the unprofitable store in Canyon City. Another is to outsource the acquisition of onions, rather than growing them. Another proposal is to sell packaged beef to a non-competing restaurant chain under a private label. The final proposal is to scrap packaging material that is printed with an old logo. Michelle Euray is controller for Pop-In Burgers, and is reviewing staff-prepared reports for each proposal. The reports are summarized as follows: Canyon City Proposal: The Canyon City store should be closed. The company is a consistent money loser. Below is an income report for the Canyon City store for the past year. Half of the fixed expenses relate to facilities rent under a 20-year non-cancelable lease. The lease costs cannot be avoided, and the location is not able to be subleased to...
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