Question

(0.6) The Express Banquet has tu restaurants together total $459.000 pe average sales check per customer nquet has two restaurants that are open 24-hours a day. Fixed costs for the tu total $459.000 per year. Service varies from a cup of coffee to full meals. The customer is $3.40. The income tax rate is 30%. Target net income is neck per customer is $8.50. The average cost of food and other variable costs for each ome tax rate is 30%. Target net income is $107,100. Questions: 1. Compute the revenues needed to earn the target net income. 2. How many customers are needed to break even? 3. How many customers are needed to earn net income of $107,100? 4. Compute net income if the number of customers is 170,000.

Answer 1

Given Targeted Net 1ncome Ip7,100 This s considered as Income atter tax 10h1Dtoo projAt before tax 70 153,000 profft befpre Tar Contibutton per vnit 3.50 340 5.1 5.1 DO Contibution Patio 2. 60l Revenuu nudud to earn targeted Net Income red toit+ProfE Contibubon Paho 459,000+153,000 2 10,20,D00f [1,D20,0004] fred cost 2 Break even Drit Contibutioo per 459,D00 51 90,00D Customers

3. customert Alee ded tox 1,ao,000 Net mom ot LO100 8.50 la0,ooD uttomn 4.Net mcome 4 number of cutomer 9s tto,DDD ParHuulars Saler 170,0DOX 8.5D Amount 1445o00 en: Vania bort 170,000x 5.1 Contributon 8,000 267000 2Hxed cost 459.000 Net profit betore tar Tax l. @ 30 408,0D0 fyelaa4oD 85,600 Netproft Aa 999 01