The

ExpressBanquet

has two restaurants that are open 24 hours a day. Fixed costs for the two restaurants together total

$409,500

per year. Service varies from a cup of coffee to full meals. The average sales check per customer is

$9.00.

The average cost of food and other variable costs for each customer is

$4.50.

The income tax rate is

30%.

Target net income is

$100,800.

Requirements

1. Compute the revenues needed to earn the target net income.

2. How many customers are needed to break even? To earn net income of

$100,800?

3. Compute net income if the number of customers is

145,000.

Question content area bottom

Part 1

Requirement 1. Compute the revenues needed to earn the target net income.

Using the equation method, select the basic formula used to compute the revenues needed to earn the target net income.

Revenues

-

Fixed costs

-

Variable costs

=

Target net income

1 - Tax rate

Part 2

The revenues needed to earn the target net income is

.