With the following information please solve B and C.

A 200-seat restaurant with average daily turnover of 2 and average check of $7 opens 365 days a year. Total variable costs are $300,000. Fixed

costs are $500 000

a. How much is the current operating income? (Anw: 222,000)

b. What is the variable cost %?

c. The owner wants to increase the operating income. She decides the best way is to join a national franchise. The franchisor requires a fixed

loyalty fee of $10,000 a year and 5% of the revenue to be contributed to the national marketing program. How much revenue does the restaurant have to generate to achieve an operating income of $500,000?