What is the expected total fixed cost

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Question - You have the following projections about the costs in a family restaurant for next year. Net income required is 22% on the owner's present investment of $80,000. The income tax rate is 28%. A depreciation rate of 20% should be considered on the book value ($76,000) of furniture and equipment. Interest on a loan outstanding of $35,000 is 18%. The variable costs breakdown is as follows: food cost 38% of sales revenue, wage cost 34% of sales revenue and other costs 10% of sales revenue. Some of the known fixed costs are: Insurance $3,000, License $ 2,500, Utilities $8,400, Maintenance $3,600, Administration $9,800 and Salaries $41,600. What is the expected total fixed cost?

a. $24,444

b. $86,900

c. $90,400

d. $695,903

e. None of the above

Reference no: EM132792021

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