Income OASTAL red? How many more guests are needed to generate to Emak even? be the new net income or loss? Assume that Anytown Restaurant serves only 84,000 guests. What will be its netics a. What is Anytown Restaurant's revenue? b. What is Anytown Restaurant's guest check average? c. Assume the Anytown Restaurant has fixed costs of $95,000; what are its variable til (Hint: all costs - fixed costs = variable costs) 2. What is the variable cost per guest? How many guests must the restaurant serve to break even? How many guests must be served to have a net income (profit) of $105,00 34 Operations Budgeting and Cost-Volume-Profit Analysis How many guests must be served for the Blue Ridge Cafe to be d. the owner needed a net income of at least $114,000, how many grew If the Blue Ridge Caf decides to close during two months that the slow business, it will lose about 18,000 guests. If the owner chooses to The manager is considering a kitchen renovation that will add $7.90 does this during the first year that it closes for two months? (See Que (depreciation and interest) each year. How much will the cafe stret The Blue Ridge Caf closes for two months (Question F), incurs the 14 percent increase in variable costs. How many additional guests at the costs (Question G), and is the victim of a problem in the economy that maintain its net income level (Question G)? The Anytown Restaurant has recorded the following financial information a net Problem 5 $365,000 $315,000 $224,000 $76,000 89,000 Food costs Labor costs All other costs (including fixed costs) Net income (profit) Number of guests served (loss)? What will be the fixed costs under the new budget? Leuming the owner is willing to break even on the restaurant's operation, how much in e Ridge Cafe's budget for next year indicates the following: Cost-Volume-Profit Analysis 33 ww 3 food operations budget for the Hiltown Restauratorio enefits ating expenses ve general intenance te/property taxes Gott) before taxes oems beyond the control of the owner (ongoing terrorism alerts that have sig duard the tourist travel on which the restaurant relies) have caused a substantial Avenue In June (the restaurant operates on a calendar year Vanuary- budget), the owner reforecasted revenues down to $1,100,000. sing the owner wants to maintain the original "bottom line profit income before taxes) of $70,000, how much in revenues will remain to be spent on var- Problem 3 1.400.000 434,000 364,000 42,000 112.000 14,000 42,000 70,000 56,000 14,000 70,000 28,000 14,000 42,000 28,000 70,000 NoN pense Domain hants to be spent on Problem 4 Revenues $765,000 Total fixed costs $91,000 Total variable costs $512,000 Total Costs $603,000 Net income before tax $162,000 Revenue estimates assume 89,470 guests will be served. 1. What is the guest check average? What are the variable costs per guests