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 sales 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. (5 marks)
(b) (i) How many customers are needed to break-even? (2 marks)
(ii) How many customers are needed to earn a net Income of $105,000? (
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