1. 1. What is the required revenue to satisfy the following conditions? 
2. Contribution margin per unit = $4, breakeven (operating income = $0), fixed cost = $18,000, average variable cost per unit = $12

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3. 2. A 100-seat restaurant with average daily turnover of 2 and average check of $15 opens 365 days a year. Total variable costs are 438,000. Fixed costs are $636,000 a year.

1. How much is the current operating income?

2. What is the variable rate?
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3. 3. The owner wants to increase the operating income. She decides the best way is to join a national franchise. The franchisor requires a fixed loyalty fee of $20,000 a year and 3% of the revenue to be contributed to the national marketing program. How much revenue does the restaurant have to generate to achieve an operating income of $300,000?

Answer rating: 100% (QA)

1 To calculate the required revenue to satisfy the given conditions we need to determine the breakeven point where the operating income is zero The co... View the full answer