Natwar has spent considerable time in periodically refining the restaurant's menu in order to distinguish the restaurant from other popular Indian restaurants in Sydney. The restaurant has set menus consisting of 5 different set menu combinations, with each combination comprising a bundle of 6 different traditional and fusion menu items plus drinks. They have an average of 200 customers visiting the restaurant a day on weekends and around 80 customers a day during weekdays. Each customerorder provides the business an average revenue of $50. The restaurant is open for 350 days in the year (100 weekends days and 250 weekdays). The business has been spending $140,000 on advertising and have 3 highly skilled fulltime chefs who were paid $75,000 each annually. Annually, the restaurant paid $9,000 for food licensing, $20,000 for shop insurance, $15,000 for thirdparty liability insurance, $5000 a month for rent, $3000 a quarter for utility (electricity and gas), and $13,000 annually for miscellaneous administration expenses. They also had equipment (stove, oven, fridge, freezer, fryer, tandoor oven and grill) and furniture worth $1,000,000 all of which were expected to have a 10year life period and were depreciated on a straightline basis. On average, the cost of food and drinks was $10 per customer, and the cost of food spoilage averaged around $0.75 per customer. Natwar purchased all grocery items from various wholesalers and kept a strong focus on the quality of the ingredients as customers often judged a restaurant by how it compares with others. In the year 2020, due to COVID, the restaurant had considerable disruptions in its operations for 25 weeks (July to December) when it could only have half the number of customers it used to usually get before. Though operations continued with restricted operations for the first six months in the year 2021, with the Delta variant spreading fast and COVID cases increasing, the restaurant had to shut down

operations for the second half of the year till December 2021. Given the increased pressures to cut costs even further, 2 of the fulltime chefs were made redundant and there was no need for any waiters or casual helpers. The business also reduced their regular advertising cost to $25,000 with a focus on attracting home deliveries. Their thirdparty liability insurance reduced by 50% as there were no customers entering the premises during this period. Additionally, their utility bills reduced by 40%. To make home deliveries more attractive, instead of having a set menu, Natwar decided to introduce a 5course set meal offering ONLY during weekends for an attractive price of $40 per meal. Since they only cooked a 5course set meal, they were able to now reduce the cost of food to just $8 per customer delivery. There was no necessity to cook food in advance as they exactly knew the number of orders. During this period, the food spoilage cost averaged at $0.2 per customer. They had to spend $10 per hour on delivery staff who altogether worked for 30 hours a week.

Q1.

In this situation, Natwar wants you to calculate the number of home deliveries and the sales revenue required to breakeven. He also wants you to calculate all other relevant CVPbased calculations (Hint: Calculate these figures only for the 6 months till December 2021).

Q2.

Krishang's Kitchen had 50 home deliveries a week. If this is the case, what income did they receive from home deliveries during total lockdown? What was their total net profit/loss for the year 2021? Was the restaurant's capacity utilised optimally? Given how critical this period was, Natwar wants you to provide a critical analysis of the calculation results in order for him to understand if his decisions were on the right track and the kind of modifications that would be most appropriate for 2022.