Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Swift Feast has two restaurants that are open 24 hours a day. Fixed costs for the two restaurants together total $450,000 per year.

image text in transcribed

The Swift Feast has two restaurants that are open 24 hours a day. Fixed costs for the two restaurants together total $450,000 per year. Service varies from a cup of coffee to full meals. The average sales check per customer is $8.00. The average cost of food and other variable costs for each customer is $3.20. The income tax rate is 30%. Target net income is $105,000. 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 $105,000? 3. Compute net income if the number of customers is 145,000. 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. Variable costs = Target net income Revenues Fixed costs 1 - Tax rate The revenues needed to earn the target net income is

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Democratic Audit Of Poland 2014

Authors: Radoslaw Markowski, Michal Kotnarowski, Michal Wenzel, Marta Zerkowska-Balas

1st Edition

3631656912, 978-3631656914

More Books

Students also viewed these Accounting questions