Question
The average check (selling price per cover) for the Dorman BBQ Restaurant is Ksh. 16. The restaurant averages 85 covers sold a day or 2,250
The average check (selling price per cover) for the Dorman BBQ Restaurant is Ksh. 16. The restaurant averages 85 covers sold a day or 2,250 covers per month. The restaurant currently loses money as indicated in the following statement:
Income Statement for an Dorman Barbecue Restaurant | ||
Statement Item | Ksh Amount | Percent of Income |
Sales (2,250 Covers x $16) | Ksh 40,800 | 100% |
(Deduction) Variable Costs | (kshs. 29,376) | (72%) |
(Total) Contribution Margin | Ksh. 11,424 | 28% |
(Deduction) Fixed Costs | (ksh. 13,464) | (30%) |
(Total) Operating Income | (ksh. 2,040) | (5%) |
Required:
The owner wants to know the sales volume required in terms of both Kenyan shillings and the number of covers for the restaurant to break even considering its current expense structure.
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