Problem
Quick bites has a restaurant that is opened all day. Fixed costs total $450,000 per year. Service varies from a cup of coffee to full meals. The average sale 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.
(a) Compute the revenues needed to earn the target net income.
(b) (i) How many customers are needed to break-even?
(ii) How many customers are needed to earn a net Income of $105,000?