The ExpressMeal has two restaurants that are open 24 hours a day. Fixed costs for the two restaurants together total $400,000per year. Service varies from a cup of coffee to full meals. The average sales check per customer is $8.50. The average cost of food and other variable costs for each customer is $3.50. The income tax rate is 30%. Target net income is $140,000.

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

$140,000?

3. Compute net income if the number of customers is

150,000.