Mr. Park recently opened a high-end Korean cafe in Jnkping. Since he has limited accounting knowledge, he has asked for your help about certain factors related to his business, which also serves lunch and dinner.

Mr. Park informs you that his fixed costs is $25,200 per month. The average total bill to a customer who visits the cafe is $21.60 per customer and the average variable cost per meal is $11.60.

(a)How many meals must the cafe serve to achieve a profit of $10.080?

(b)What is Mr. Park's break-even point in number of meals served per month?

(c)Mr.Park's fixed costs increased to a total of $35,910 per month and average variable costs also increased to $13.90 per meal. If Mr. Park increases his average price to $26.90, how many meals must be sold in order for Mr.Park to make a profit of $10,080 per month?

(d)Briefly discuss any two assumptions that must be held in performing a cost-volume-profit analysis.