During 2020, the Beach Restaurant had sales revenues and food costs of $800,000 and $600,000, respectively. During 2021, Beach plans to introduce a new menu item that is expected to increase sales revenues by $100,000 and food costs by $40,000. Assuming no changes are expected for the other food items, operating profits for 2021 are expected to increase by:

Question

Quizplus · Accepted Answer

The increase in operating profits is calculated by subtracting the increase in food costs from the increase in sales revenues: $100,000 - $40,000 = $60,000.

During 2020, the Beach Restaurant Had Sales Revenues and Food