Question 4 (6 points)

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 bills per customer is $8.

The average cost of food and other variable costs for each customer is $3.20. The income tax is 30%. Target net income is $105,000.

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.