# Bakers

Content type
User Generated
Subject
Accounting
Type
Homework
Rating
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1/4
Surname 1
Students' Name
Professor
Course
Due date
Baker’s Consolidated Company;
1.
Cafeteria





  



 
 
Therefore profit will be given by:


 
 

Vending Machine
Total revenue (sales) is 40% greater than current sales (12,000), therefore total revenue is given
by:





Profit is given 16% of sales, therefore profit is given by:


 

Showing Page:
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Surname 2
The profit margin of the cafeteria and the vending machine is
  
Therefore:
Revenue for cafeteria = \$ 12,000
Revenue for Vending machine





The operating income of the cafeteria is  while that of the vending machine is 
as indicated above.
1.
I recommend Baker Consolidated to go for Vending Machine because it is cheaper to run.
From the data provided, replacing the cafeteria with the vending machine implies that the
business will avoid all the cafeteria costs. Operating a business with less operational costs
increases the efficiency of production.
Secondly, the vending machine operates for a longer period than the cafeteria. Operating
business for long hours attracts more customers and assures them that the business is operating at
their convenience. This in return, leads to increased revenue.
The main reason for opening a business is to make a profit; therefore, it is better if the
company deals with the business that brings more money to the company. The vending machine
makes greater profit margin than the cafeteria as calculated above. However, the company

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Surname 1 Students' Name Professor Course Due date Baker’s Consolidated Company; 1. Cafeteria 𝑃𝑟𝑜𝑓𝑖𝑡 (𝑃) = 𝑅𝑒𝑣𝑒𝑛𝑢𝑒(𝑅) − 𝐶𝑜𝑠𝑡𝑠 (𝐶) 𝑃𝑟𝑜𝑓𝑖𝑡 (𝑃) = 𝑅𝑒𝑣𝑒𝑛𝑢𝑒(𝑅) − [𝑉𝑎𝑟𝑖𝑎𝑏𝑙𝑒 𝐶𝑜𝑠𝑡𝑠 + 𝐹𝑖𝑥𝑒𝑑 𝐶𝑜𝑠𝑡𝑠] 40 𝑉𝑎𝑟𝑖𝑎𝑏𝑙𝑒 𝐶𝑜𝑠𝑡𝑡𝑠 = 100 × 12,000 = 4,800 𝐹𝑖𝑥𝑒𝑑 𝐶𝑜𝑠𝑡𝑠 = 4,700 Therefore profit will be given by: 𝑃𝑟𝑜𝑓𝑖𝑡 (𝑃) = 12,000 − (4,800 + 4,700) = 12,0000 − 9500 = \$ 2,500 Vending Machine Total revenue (sales) is 40% greater than current sales (12,000), therefore total revenue is given by: 40 𝑇𝑜𝑡𝑎𝑙 𝑅𝑒𝑣𝑒𝑛𝑢𝑒 = (100 × 12,000) + 12,000 = 16,800 Profit is given 16% of sales, therefore profit is given by: 16 𝑃𝑟𝑜𝑓𝑖𝑡 = 100 × 16,800 = \$2,688 Surname 2 The profit margin of the cafeteria and the vending machine is 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 = 2,688 − 2,500 = 188 Therefore: Revenue for cafeteria = \$ 12,000 Revenue for Vending machine 40 𝑇𝑜𝑡𝑎𝑙 ? ...
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### Review

Anonymous
Great content here. Definitely a returning customer.

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