Ruby ’s Bu et offers customers a choice of various dishes for a flat price of $10 per person. While people choose different items, it is remarkable that they all eat roughly the same amount (except for those football players!). Since it is a buffet, the only help Ruby needs is a cook. Ruby cleans the tables and handles the cash register on her own. She only draws a salary if there is a profit. Below is a table detailing Ruby ’s operating costs for two different volumes of customers.

REQUIRED:

a. Complete the above chart, noting which costs are fixed and which are variable.

b. Develop a cost formula for Ruby. Be careful here because you want the costs for one customer, not 50, right?

c. Develop a breakeven analysis for Ruby’s Buffet in number of customers.

d. Develop a breakeven analysis for Ruby in dollars of revenue.

e. Ruby wants to make $4,000 per month before- tax profit. How many customers does she need to handle now?

f. Ruby has changed her mind and wants a guarantee of $4,000 after- tax profit. She pays 25% taxes on her profits. How many customers does Ruby need now?

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Ruby's Buffet Change in Cost, Change in Cost, S0 to 100 Customers Varidbility (Variable or Fixed) Dõ to 150 Cost for 50 Customers Cost for 100 Customers Cost for 150 Customers Resource Customers Cook $3,000 $3,000 $3,000 Food $200 $400 $600 Beverages $25 $50 $75 Cash register $150 $150 $150 Tables $1,500 $1,500 $1,500 Plates and silverware $750 $750 $750 Building $2,000 $2,000 $2,000 Total Variable Costs for 50 Customers Cost Formula: per Customer Plus