Compute the revenues needed to earn the target net income

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Reference no: EM13864584

The Swift Meal has two restaurants that are open 24 hours a day. Fixed costs for the two restaurants together total $ 456,000 per year. Service varies from a cup of coffee to full meals. The average sales check per customer is $ 9.50. The average cost of food and other variable costs for each customer is $ 3.80. The income tax rate is 30%. Target net income is $ 159,600.

Required

1. Compute the revenues needed to earn the target net income.

2. How many customers are needed to break even? To earn net income of $ 159,600?

3. Compute net income if the number of customers is 145,000.

Reference no: EM13864584

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