The Ashas family restaurant is open 24 hours a day and serves breakfast, lunch, and dinner. The owner of the business has determined that fixed costs are SAR24, 000 per month. Variable costs are estimated at SAR9.60 per meal. The average total bill (excluding tax and tip) is SAR12 per customer.

1. Compute the break-even point in meals.
2. Compute the break-even volume in SAR.
3. Compute the number of meals that must be served if the Ashas family restaurant wishes to earn a profit of SAR6, 000.

Solution:

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