Cost-Volume-Profit Analysis

For #1 = The owner of The Rutles Restaurant is concerned about changing costs and the inability to increase meal prices. During 2020, the average selling price for a meal served was $12.75; the average variable costs were $7.25, and the average monthly fixed costs totaled $20,000.

1b. Calculate the Break-even Point for December 2020 in revenue dollars:

1c. Calculate the number of meals to sell in December 2020 to achieve a profit of $5000:

1d. In December 2020, how many meals on average, per night are needed to break-even

For #2 = In 2021, the average monthly fixed costs are expected to increase by $2,000 above 2020. In addition, consider the following January 2021 data:

Cost of Food and Bev = $11,000 | Cost of Hourly Labor = $9,000 | Covers = 2550 1a. Calculate the Break-even Point for December 2020 in # of meals sold:

In 2021, the average monthly fixed costs are expected to increase by $2,000 above 2020. In addition, consider the following January 2021 data:

Cost of Food and Bev = $11,000 | Cost of Hourly Labor = $9,000 | Covers = 2550

What is the Variable Cost per meal in January 2021

2b. Given the expected cost increases for 2021, calculate the Break-even Point for January

2019 in number of meals sold:

2c. Given the expected cost increases for 2021, calculate the Break-even Point for January 2019 in revenue dollars:

2d. Calculate the number of meals to sell in January of 2021 to achieve an income of $5000:

Required:

3. You have to consider whether your restaurant should stay open for an extra hour under the following conditions: The average check in your restaurant is $19, your f & b cost percentage is 30%, your fixed cost for the hour is $120.

How many covers would you need to serve to break even?