a. What will be b. Assuming the owner wants to maintain the original "bottom line" pro [profit] before taxes) of $70,000, how much in revenues will remain to be sp able costs? c. Assuming the owner is willing to break even on the restaurant's operation, in revenues will remain to be spent on variable costs? Problem 4 The Blue Ridge Café's budget for next year indicates the following: Revenues $765,000 Total fixed costs Total variable costs Total Costs Net income before tax $91,000 $512,000 $603,000 $162,000 Revenue estimates assume 89,470 guests will be served. a. What is the guest check average? b. What are the variable costs per guests? c. How many guests must be served for the Blue Ridge Café to break even? d. If the owner needed a net income of at least $114,000, how many guests woul be served? e. How many more guests are needed to generate a net income of $114,000 needed to break even? f. If the Blue Ridge Café decides to close during
a. What will be b. Assuming the owner wants to maintain the original "bottom line" pro [profit] before taxes) of $70,000, how much in revenues will remain to be sp able costs? c. Assuming the owner is willing to break even on the restaurant's operation, in revenues will remain to be spent on variable costs? Problem 4 The Blue Ridge Café's budget for next year indicates the following: Revenues $765,000 Total fixed costs Total variable costs Total Costs Net income before tax $91,000 $512,000 $603,000 $162,000 Revenue estimates assume 89,470 guests will be served. a. What is the guest check average? b. What are the variable costs per guests? c. How many guests must be served for the Blue Ridge Café to break even? d. If the owner needed a net income of at least $114,000, how many guests woul be served? e. How many more guests are needed to generate a net income of $114,000 needed to break even? f. If the Blue Ridge Café decides to close during
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Do problem 4, a through h.
![a. What will be the fixed
b. Assuming the owner wants to maintain the original "bottom line" profit (incon
[profit] before taxes) of $70,000, how much in revenues will remain to be spent on var
able costs?
c. Assuming the owner is willing to break even on the restaurant's operation, how muc
in revenues will remain to be spent on variable costs?
Problem 4
The Blue Ridge Café's budget for next year indicates the following:
$765,000
Revenues
Total fixed costs
Total variable costs
Total Costs
Net income before tax
$91,000
$512,000
$603,000
$162,000
Revenue estimates assume 89,470 guests will be served.
a. What is the guest check average?
b. What are the variable costs per guests?
c. How many guests must be served for the Blue Ridge Café to break even?
d. If the owner needed a net income of at least $114,000, how many guests would need to
be served?
e. How many more guests are needed to generate a net income of $114,000 than are
needed to break even?
f.
If the Blue Ridge Café decides to close during two months that traditionally generate
slow business, it will lose about 18,000 guests. If the owner chooses to do this, what
will be the new net income or loss?
g. The manager is considering a kitchen renovation that will add $7,500 in new fixed
costs (depreciation and interest) each year. How much will the café's net income (loss)
be if it does this during the first year that it closes for two months? (See Question F
above.)
h. The Blue Ridge Café closes for two months (Question F), incurs the additional fixed
costs (Question G), and is the "victim" of a problem in the economy that results in a
14-percent increase in variable costs. How many additional guests are needed for it to
maintain its net income level (Question G)?
Problem 5
The Anytown Restaurant has recorded the following financial information:
Food costs
Labor costs
All other costs (including fixed costs)
Net income (profit)
Number of mont
$365,000
$315,000
$224,000
$76.000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6a2f95ed-7171-45b2-9304-9328ccddc530%2Fbfa527c7-8aef-4f9f-9131-83d3189cad7b%2F2teamk_processed.jpeg&w=3840&q=75)
Transcribed Image Text:a. What will be the fixed
b. Assuming the owner wants to maintain the original "bottom line" profit (incon
[profit] before taxes) of $70,000, how much in revenues will remain to be spent on var
able costs?
c. Assuming the owner is willing to break even on the restaurant's operation, how muc
in revenues will remain to be spent on variable costs?
Problem 4
The Blue Ridge Café's budget for next year indicates the following:
$765,000
Revenues
Total fixed costs
Total variable costs
Total Costs
Net income before tax
$91,000
$512,000
$603,000
$162,000
Revenue estimates assume 89,470 guests will be served.
a. What is the guest check average?
b. What are the variable costs per guests?
c. How many guests must be served for the Blue Ridge Café to break even?
d. If the owner needed a net income of at least $114,000, how many guests would need to
be served?
e. How many more guests are needed to generate a net income of $114,000 than are
needed to break even?
f.
If the Blue Ridge Café decides to close during two months that traditionally generate
slow business, it will lose about 18,000 guests. If the owner chooses to do this, what
will be the new net income or loss?
g. The manager is considering a kitchen renovation that will add $7,500 in new fixed
costs (depreciation and interest) each year. How much will the café's net income (loss)
be if it does this during the first year that it closes for two months? (See Question F
above.)
h. The Blue Ridge Café closes for two months (Question F), incurs the additional fixed
costs (Question G), and is the "victim" of a problem in the economy that results in a
14-percent increase in variable costs. How many additional guests are needed for it to
maintain its net income level (Question G)?
Problem 5
The Anytown Restaurant has recorded the following financial information:
Food costs
Labor costs
All other costs (including fixed costs)
Net income (profit)
Number of mont
$365,000
$315,000
$224,000
$76.000
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