Reference no: EM132842811

1. A restaurant wants a 15% after tax return on its investment of $600,000, assuming a 40% tax rate. 

•  What is the return in $ required? 
• What is the income before tax required to achieve the 15% after tax return? 
•  What is the amount of tax to be paid for the above income? 

2. A restaurant has sales revenue of $580,000 with a variable cost of sales of 42%. Fixed costs are $245,920. The owner wishes to have $86,000 after tax return on a tax rate of 32%.

• What is the amount of additional sales revenue needed to support the net income after tax? 
• What is the amount of tax? 
• What is the breakeven sales revenue?

3. A restaurant has sales revenue of $1,000,000 with average variable cost of 40%. Fixed costs are $300,000. Tax rate is 25% and a net income after tax of $80,000 is required.

• Find out the breakeven sales revenue. 
• Find out the total sales revenue required to cover fixed costs, tax, and the required net income after tax. 

4. A restaurant has an average check of $16. Its monthly sales revenue is $800,000, variable costs is $240,000 and fixed costs of $350,000.

• What is the breakeven sales revenue? 
• What is the breakeven sales unit? 
• If actual sales revenue was $480,000, what would the restaurant's income be? 
• If actual sales revenue was $480,000, how many fewer customers per month would be served than at the forecasted sales level of $800,000? (average check remains at $16)?. 
• If price is increased and average check becomes $20 but the restaurant manages to keep the variable cost (in $) the same as before, what would be the breakeven sales revenue?