The President of the company is considering adding sandwiches to the menu. Sales will be expected to increase by $60,000. The cost of sandwich supplies would be $30,000. Labor costs would increase 40% and other costs 10%. The current manager will continue to manage the operation.
Required:
(a) Prepare a quantitative analysis of the decision to add sandwiches to the menu.
(b) What qualitative considerations should the company consider in this decision?
C & P Frosties is a local ice cream shop. The company currently is showing an operating loss, as evidenced by the income statement below:

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The Answer of The President of the company is considering adding sandwiches to the menu. Sales will be expected to increase by $60,000. The cost of sandwich supplies would be $30,000. Labor costs would increase 40% and other costs 10%. The current manager will continue to manage the operation.
Required:
(a) Prepare a quantitative analysis of the decision to add sandwiches to the menu.
(b) What qualitative considerations should the company consider in this decision?
C & P Frosties is a local ice cream shop. The company currently is showing an operating loss, as evidenced by the income statement below:

The President of the Company Is Considering Adding Sandwiches to the Menu