Question - The local Japanese-style steakhouse expects sales to be $500,000 in January. The average restaurant bill is $50. Only 25% of restaurant bills are paid in cash, while 70% are paid with credit cards and 5% are paid with debit cards. The transaction fees charges by the credit and debit card issuers are as follows:
Credit cards: $0.50 per transaction + 2% of the amount charged
Debit cards: $0.22 per transaction + 0.05% of the amount charged
Requirements
a. How much of the total sales revenue is expected to be paid with cash?
b. How many customer transaction does the company expect in January?
c. How much of the total sales revenue is expected to be paid with credit cards?
d. How many customer transactions will be paid for by customers using credit cards?