BACKGROUND

You are opening a new restaurant and need to determine the revenue required to generate your desired profit level. Use the information provided below to calculate the required information, then analyze your results. Refer to Textbook Page 133 for calculations.

ASSIGNMENT GUIDELINES

• Assume the following data has been obtained from your operation's budget:
  • Total Annual Revenues = $521,000
  • Total Annual Fixed Costs = $49,000
  • Total Annual Variable Costs = $418,000
  • Total Annual Costs = $467,000
  • Total Net Income Before Taxes = $54,000
  • Number of Guests Used to Estimate Budgeted Revenues = 57,000
• Calculate the following problems:
  • Guest Check Average
  • Variable Cost per Guest
  • Number of Guests Served at Breakeven Point
  • Number of Guests Served at Desired Net Income Level of $75,000
  • Number of Additional Guests Needed Because of New Fixed Costs (Assume $3,500 Increase in Fixed Costs)
  • Total Number of Guests Needed Due to Additional Variable Costs (Assume 10% increase in Variable Costs)
• Answer the follow-up questions below.