Break-even point in number of meals served per month

Assignment Help Finance Basics

Reference no: EM131815753

Question: Basic CVP Relationships, Restaurant Joann Swanson owns and operates a restaurant. Her fixed costs are $17,000 per month. She serves luncheons and dinners. The average total bill (excluding tax and tip) is $18 per customer. Swanson's present variable costs average $9.50 per meal.

1. How many meals must she serve to attain a profit before taxes of $8,500 per month?

2. What is the break-even point in number of meals served per month?

3. Suppose Swanson's rent and other fixed costs rise to a total of $25,420 per month and variable costs also rise to $11.40 per meal. If Swanson increases her average price to $22, how many meals must she serve to make $8,500 profit per month?

4. Assume the same situation described in requirement 3. Swanson's accountant tells her she may lose 15% of her customers if she increases her prices. If this should happen, what would be Swanson's profit per month? Assume that the restaurant had been serving 3,000 customers per month.

5. Assume the same situation described in requirement 4. To help offset the anticipated 15% loss of customers, Swanson hires a pianist to perform for 4 hours each night for $2,300 per month. Assume that this would increase the total monthly meals from 2,550 to 2,800. Would Swanson's total profit change? By how much?

Reference no: EM131815753

Questions Cloud

Forces and modes of entry in international markets : The environmental forces and modes of entry in international markets. Name an international company

What is the most TJB could spend : The general manager of TJB Productions is trying to decide what amount to spend for advertising. What is the most TJB could spend and still break even.

Create line graph of percentage changes from a year earlier : Create a line graph of the percentage changes (inflation rates) from a year earlier. Which period experienced the highest inflation rate?

Us economy and american business : 1. Explain the symbiotic relationship between the U.S. economy and American business. Be specific in identifying how one influences the other.

Break-even point in number of meals served per month : Basic CVP Relationships, Restaurant Joann Swanson owns and operates a restaurant. Her fixed costs are $17,000 per month. She serves luncheons and dinners.

Write a one paragraph on sense functions : In one paragraph per sense, explain how each sense functions, including the biological aspects required for operating each sense.

Method of analysis : From your own experience, which method of analysis (realism, feminism...) appears best suited to address the challenges that the United States faces today?

Discuss statistic or aspect of the transatlantic slave trade : Explain at least two (2) possible reasons for the differences between the results of exploration and trade by the Chinese and by the European states

Functions of a trademark and the purpose of a copyright : Then, provide a sport-related example that will emphasize the main differences between a copyright and a trademark.

User Account

All Pages