E7.1 If revenue from a sale was $4,800 and variable costs were $2,304, what is the variable cost

percentage?

P7.7 Stellas Steak House has been operating for the past 10 years, and Stella has to negotiate

her lease on the premises for the next 5 years. Her options are to pay a fixed monthly rent of

$2,500 or to pay a variable monthly rent of 6 percent of her sales. Over the next five years

she anticipates her sales to average $550,000 per year.

a.What is Stellas indifference point on an annual sales revenue basis? (1.5 points)

b.Which option should she choose? Explain. 1.5 points)

E8.1 A restaurant has sales revenue of $240,000, fixed costs of $100,800, and variable costs of

$96,000. What is breakeven sales revenue? (1.5 points)

E8.4 A restaurant has fixed costs of $40,000 for the month of March 0002. The average check is

$12.50 with an average variable cost of $7.50. What is breakeven units of sales for the

month of March? (1.5 points)

E8.6 A restaurant has an average check of $12.95, with an average variable cost of $5.44. Fixed

costs are $140,000. Calculate the following: (5 points)

a. What is the unit contribution margin?

b. What are breakeven units?

c. What is the variable cost percentage?

d. What is the contribution as a percentage?

e. What is breakeven sales revenue?

P8.1 A restaurant with an average check of $10 per guest has the following average monthly

figures:

Sales revenue $500,000

Variable costs 260,000

Fixed costs 160,000

a.What is breakeven sales revenue? (1.5 points)

b.If actual sales revenue was $440,000, what would the restaurants operating income be?

(2 points)

P8.6 A 90-room motel has an average room rate of $65.60. Its fixed costs are $300,000 a year,

and its variable costs total $476,000 at an average occupancy of 70 percent.

a. What is the motels breakeven occupancy percentage? (2 points)

b. What level of sales revenue is required to provide an operating income (before taxes) of

$100,000 a year? (2 points)