Charlie wants to plan for his profits in June. June is historically the slowest month of the year, so he wants to plan carefully. He estimates the following: Fixed Costs = $ 47,000 Variable Cost = $ 3.12 per cover Check average = $ 6.50 per cover Desired after-tax profit = $ 3,600 Tax rate = 36%

What will be his breakeven level of sales in covers and dollars? a. 100,880 covers; 15,520.62 dollars b. 15,520 covers; 100,880.62 dollars c. 90,389 covers; 13,906.62 dollars d. 13,906 covers; 90,384.62 dollars

What will be his sales in covers and dollars if he is to achieve the desired profit level? a. 100,880 covers; 15,520.92 dollars b. 15,570 covers; 101,201.92 dollars c. 90,389 covers; 13,906.92 dollars d. 13,906 covers; 90,389.92 dollars

Based on historical data, Charlie predicts that he will sell 14,000 covers in June at a price per cover of $6.50. What will be his margin of safety in covers and sales dollars for June? Please fill in the appropriate boxes below in order to answer question 11 correctly.

How many covers is Charlies Margin of Safety per Day in June? Does this represent a high level or a low level of safety for Charlie?

a. 4 covers; low level of safety

b. 4 covers; high level of safety

c. 3 covers; low level of safety

d. 3 covers; high level of safety

Now, Charlie decides to try to decrease his variable cost percentage in June by 3%. He also decides to increase his fixed marketing costs by $1,000 and lower his selling price by $0.50 in an effort to increase covers.

What will be his sales in covers and dollars if he is to achieve breakeven with these changes?

a. 14,202 covers; 85,212.73 dollars

b. 14,243 covers; 85,458.73 dollars

c. 14,546 covers; 87,272.73 dollars

d. 14,546 covers; 94,549.73 dollars

What will be his sales in covers and dollars if he is to achieve his desired profit with these changes?

a. 16,198 covers; 97,188 dollars

b. 16,250 covers; 97,500 dollars

c. 16,345 covers; 98,070 dollars

d. 16,346 covers; 106,249 dollars