CVP, income taxes. The Rapid Meal has two restaurants that are open 24 hours a day.

Fixed costs for the two restaurants together total $540,000 per year. Service varies from a cup of coffee to full meals. The average sales cheque for each customer is $9.60.

The average cost of food and other variable costs for each customer is $3.84. The income tax rate is 30%. Target net income is $126,000.
96 CHAPTER 3 Required 1. Compute the revenues needed to obtain the target net income.
2. How many sales cheques are needed to earn net income of $126,000? To break even?
3. Compute net income if the number ofsales cheques is 150,000.