The following information is taken from the budget being proposed for the next calendar year for the Virtual Caf. Revenue estimates assume 93,750 guests will be served.

Revenue $1,500,000

Total fixed costs $336,000

Total variable costs $843,750

Total costs $1,179,750

Net income before tax $ 320,250

a. What is the guest check average? (3 points)

b. What are the variable costs per guests? (3 points)

c. How many guests must be served for the Virtual Caf to break even? (4 points)

d. If the owner needed a net income of $500,000, how many guests would need to be served? (5 points)

e. The caf expects 10% increase in variable costs and $30,000 in fixed costs. To maintain its current net income before tax, what will be the new guest check average (assuming the same number of guests will be served)? (5 points)