CVP analysis, income taxes. 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 1. Compute the revenues needed to earn the target net income. 2. How many customers are needed to break even? To earn net income of $107,100? 3. Compute net income if the number of customers is 170,000.
CVP analysis, income taxes. 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 1. Compute the revenues needed to earn the target net income. 2. How many customers are needed to break even? To earn net income of $107,100? 3. Compute net income if the number of customers is 170,000.
Chapter16: Financial Planning And Control
Section: Chapter Questions
Problem 5PROB
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CVP analysis, income taxes. 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 1. Compute the revenues needed to earn the target net income.
2. How many customers are needed to break even? To earn net income of $107,100?
3. Compute net income if the number of customers is 170,000.
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