A restaurant is being planned that will require an investment of $320,000 by the

owner. The figures below shows forecasted variable cost percentages, and

identifiable known costs

1. What is the breakeven level of sales revenue for the restaurant? Fill in the blanks

and prepare a contribution margin income statement to confirm the breakeven

calculations.

2. What required sales revenue is needed if the owner wants an 25% operating

income (before-tax) return on investment? That rent had been increased by 20%

but marketing costs had reduced by $10,000. Prepare a contribution margin

income statement to confirm the CVP calculations.

A restaurant is being planned that will require an investment of $320,000 by the

owner. The figures below shows forecasted variable cost percentages, and

identifiable known costs

2

3

1. What is the breakeven level of sales revenue for the restaurant? Fill in the blanks

and prepare a contribution margin income statement to confirm the breakeven

calculations.

4

2. What required sales revenue is needed if the owner wants an 25% operating

income (before-tax) return on investment? That rent had been increased by 20%

but marketing costs had reduced by $10,000. Prepare a contribution margin

income statement to confirm the CVP calculations.

x D 4 Calculation 5 1 ACCT2120 2 Break Even Part B 3 4 Profit 5. Management Salary and Wages 6 Insurance 7 Advertising Expense 8 Utilities and Telephone 9 Rent 10 Equipment Depreciation 11 Contribution Margin 12 Other Variable Costs 13 Wage cost variable 14 Food cost variable 15 Revenue 16 17 18 72,000 12,000 65,000 25,000 35,000 12,000 12% 25% 35%