Question: Pricing Using the Hubbart Formula Restaurant has 150 seats and expects to average 2.5 turns a day. They are open 6 days a week all

Pricing Using the Hubbart Formula Restaurant has 150 seats and expects to average 2.5 turns a day. They are open 6 days a week all year. The owner wants to earn a 12% after tax return on the invested assets of $450,000. Income tax rate: 40% Depreciation: straight line (8 years) on assets of $500,000 (salvage of $25,000) Other fixed expenses: $75,000 Variable costs: 75% of sales Mortgage interest: 8% on balance owing of $350,000 Mortgage principal: Annual principal payment required: $12,000 Vending machines make $5,000 per year. Required: (a) Calculate the break-even sales for the restaurant. (b) Calculate the average check using the information above and the Hubbart Formula

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Q. What are the Top N games based on the number of users rated and what is the average UserScore for these games? Hint: You could create a bar chart using UserCount, Name and Average UserScore in...

please help Pricing Using the Hubbart Formula Restaurant has 150 seats and expects to average 2.5 turns a day. They are open 6 days a week all year. The owner wants to earn a 12% after tax return on...

Milano Restaurant has 150 seats and expects to average 2.5 turns a day. They are open 6 days a week all year. The owner wants to earn a 12% after tax return on the invested assets of $450,000. Income...

Milano Restaurant has 150 seats and expects to average 2.5 turns a day. They are open 6 days a week all year. The owner wants to earn a 12% after tax return on the invested assets of S450,000. Income...

Michelle Restaurant has 150 seats and expects to average 2.5 turns a day. They are open 6 days a week all year. The owner wants to earn a 12% after tax return on the invested assets of $450,000....

Case study: Remedy Physiotherapy. I need help in drafting a marketing plan Names of people and businesses are disguised. Some aspects of the local area and the physiotherapy industry are simplified...

I am having a difficult time and I have another one and I am almost done with the class in 2 week Chapter 9: Discussion Questions (Pg 404-405) 2. What are some of the purposes of budgeting? 4....

0 Perterbation Dee:- Consider a system in the unperturbed state described by the hamiltonian H = T ;) the system is subjected to a H' = (8 5) where s

Multiple Choice Questions: 1. Under average cost pricing by a natural monopoly, a. Price is greater than marginal cost. b. A welfare cost will be incurred. c. The producer will earn a normal rate of...

Trees Forever, a community foundation, incurred $ 5 , 0 0 0 in expenses during 2 0 X 3 putting on its annual fund - raising talent show. In its statement of activities, Trees Forever should report...

Determine the major differences between U.S. GAAP and IFRS disclosure reporting requirements related to each separately reportable operating segment. Next, give your opinion as to whether either U.S....