E8.4 . A restaurant has fixed costs of $53,400 for the month of March 0006. The

Question

E8.4. A restaurant has fixed costs of $53,400 for the month of March 0006. The average check is $12.95, with an average variable cost of $7.38. What is breakeven units of sales revenue for the month of March?

E8.5 A small pub serving only specialty beer has fixed costs of $62,400 per year. The average contribution margin on sales revenue is $2.08. What is the number of units to be sold to reach breakeven?

E8.6 A restaurant has an average check of $12.75, with an average variable cost of $4.85. Fixed costs are $142,200. Calculate the following: a. What is the unit contribution margin?

b. What are breakeven units?

c. What is the variable cost percentage?

d. What is the contribution as a percentage?

e. What is breakeven sales revenue?

E8.7 The owner of a restaurant and bar operation wants a 20% net income after-tax return on his investment of $200,000. The tax rate is 28%. What is the net income before tax and the income tax?

Explanation / Answer

4) Average check 12.95 Average variable cost 7.38 Average contribution margin 5.57 Fixed cost            53,400 Break even units              9,587 (53400/5.57) Break even- sales revenue    124,152.60 (9587*12.95) 5) Fixed cost            62,400 Average contribution margin 2.08 Break even units            30,000 6) average check 12.75 Average variable cost 4.85 unit contribution margin 7.9 Fixed cost          142,200 Break even units            18,000 variable cost percentage 38% contribution percentage 62% Break even sales revenue          229,500 7) investment          200,000 net income before tax      55,560.00 (200000*27.78%) Tax      15,556.80 net income after tax            40,003 net income after tax percentage 20%

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