Brian and Nancy Soon live in Savannah, Georgia. Two years ago, they visited Thailand. Nancy, a professional chef, was impressed with the cooking methods and the spices used in Thai food. savanna does not have a Thai restaurant, and the Soon's are contemplating opening one. Nancy would supervisor cooking, and Brian would be the matre d'. The restaurant will serve food from Tuesday through Saturday. Brain noticed a restaurant for lease. The restaurant has seven tables, each of which can seat four guests. Tables can be moved together for a large party. Nancy is planning two seatings per evening and the restaurant will be open fifty weeks per year. The Soons have drawn up the estimates below:

-Average Revenue, including beverages and dessert = $40 per meal

-Average Cost of the Food = $12 per meal

-Chef's and dishwashers salaries = $50,400 per year

-Rent (premises, equipment) = $4,000

-Cleaning (linen and premises) =$800 per year

-Replacement of dishes, cutlery, glasses = $300 per month

-Utilities, Advertising, Telephone = $1,900

Required:

1) Compute annual break even point in meals (units) and dollars (sales)

2) Computer number of meals in amount of sales revenue that will be required to earn an income of $75,600

3) How many meals must the Soons serve to earn $75,600?

4) Should Brian and Nancy open the restaurant?

5) Write a memo to Brian and Nancy describing how you arrived at your Calculations in your recommendations for them. Remember they do not have any accounting background and you will need to explain to them and not only your calculations but the financial implications of your recommendation.