Answer to Question #286474 in Other for Ruth

Question

1.     The Express Banquet has two restaurants that are open 24-hours a day. Fixed costs for the two restaurants together total $459,000 per year. Service varies from a cup of coffee to full meals. The average sales check per customer is $8.50. The average cost of food and other variable costs for each customer is $3.40. The income tax rate is 30%. Target net income is $107,100.

Required

a. Compute the revenues needed to earn the target net income.

b. How many customers are needed to break even? To earn net income of $107,100?

c. Compute net income if the number of customers is 170,000

Answer 1

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