Steve and Linda Jones recently moved to Memphis, Tennessee. Two years ago, they visited Thailand. Linda, a professional chef, was impressed with the cooking methods and the various spices used in traditional Thai food. As Columbus does not have an authentic restaurant, the Joneses are contemplating opening one and have come to you for advice.

Linda plans to supervise the cooking and Steve will quit his current job where he makes $ 50,000 per year. Steve has found a building for lease that had served as a restaurant prior to the closing of its doors. The setup of the restaurant will allow for seven tables and you can seat 4 at each table. Tables can be moved together to accommodate large parties. Linda and Steve estimate that they can get two seating per evening and they plan to be open Tuesday night thru Saturday night 50 weeks per year.

The Joneses provide you with the following estimates:

Projected average revenue, including beverages and desserts $ 45 per meal

Average cost of food $ 15 per meal

Chefs, waiters, and dishwasher salaries $ 5,100 per month

Rent (building and various equipment) $ 4,000 per month

Cleaning (both linen and premises) $ 800 per month

Replacement of dishes, cutlery, glasses, etc $ 300 per month

Utilities, advertising, and telephone $ 2,300 per month

-Identify for them the annual number of meals needed to breakeven and the sales revenue to breakeven.

-Identify for them how many meals the Joneses must serve to make a profit of $ 75,600 (the desired profit level) in year One.

-Identify THREE (3) major factors the Joneses should consider before they make their decision as to whether to open the restaurant or not.