US Rent Other operating costs Insurance Depreciation Property taxes 3,000 2.000 2,000 4.000 1.000 1,200 1,500 6,000 3,000 4,000 5,000 1,000 1,200 1,500 se cost be Required: costs)? 1. Identify each cost as fixed, variable or mixed. 2. What are the estimated monthly fixed costs (including the fixed portion of mixed 3. What are the estimated variable costs per cover sold? 4. Develop a single equation to estimate costs at various levels of activity 5. Project the total costs if 3,200 covers are sold using the equation from part 4 Problem 10 The Gator Restaurant currently has a variable lease that is 6 percent of its total revenue. An alternative approach is $120,000 per year. Assume its average and marginal tax rates are 35 percent and 40 percent, respectively. Required: 1. Determine its indifference point. 2. If its annual sales are expected to be $3,000,000, which type of lease do you recom- mend? Provide figures to support your recommendation. 3. Assume the Gator Restaurant's indifference point is $1,500,000. What is the net of tax cost of making an error in signing a variable lease when its annual sales are $1,700,000