The Swift Feast has two restaurants that are open 24 hours a day. Fixed costs for the two restaurants together total $450,000 per year. Service varies from a cup of coffee to full meals. The average sales check per customer is $8.00. The average cost of food and other variable costs for each customer is $3.20. The income tax rate is 30%. Target net income is $105,000. Requirements 1. Compute the revenues needed to eam the target net income. 2. How many customers are needed to break even? To eam net income of $105,000? 3. Compute net income if the number of customers is 145,000. Requirement 1. Compute the revenues needed to eam the target net income. Using the equation method, select the basic formula used to compute the revenues needed to earn the target net income.
The Swift Feast has two restaurants that are open 24 hours a day. Fixed costs for the two restaurants together total $450,000 per year. Service varies from a cup of coffee to full meals. The average sales check per customer is $8.00. The average cost of food and other variable costs for each customer is $3.20. The income tax rate is 30%. Target net income is $105,000. Requirements 1. Compute the revenues needed to eam the target net income. 2. How many customers are needed to break even? To eam net income of $105,000? 3. Compute net income if the number of customers is 145,000. Requirement 1. Compute the revenues needed to eam the target net income. Using the equation method, select the basic formula used to compute the revenues needed to earn the target net income.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 2CE
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