# The Rapid Meal has two restaurants that are open 24 hours a day. Fixed costs for the two restaurants together total $450,000 per year. Service varies from a cup of coffee to full meals. The average sales bill per customer

The Rapid Meal has two restaurants that are open 24 hours a day. Fixed costs for the two restaurants together total $450,000 per year. Service varies from a cup of coffee to full meals. The average sales bill per customer is $8.00. The average cost of food and other variable costs for each customer is $3.20. The income tax rate is 30%. Target net income is $105,000.

**Required**

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

2. How many customers are needed to earn net income of $105,000? How many customers are needed to break even?

3. Compute net income if the number of customers is 150,000.

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## 1 To compute the revenue needed to earn the target net income we can use the formula Revenue Fixed C…View the full answer

**Related Book For**

## Cost Accounting A Managerial Emphasis

**ISBN:** 978-0133138443

7th Canadian Edition

**Authors:** Srikant M. Datar, Madhav V. Rajan, Charles T. Horngren, Louis Beaubien, Chris Graham

**Question Details**

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