The Blue Ridge Cafs budget for next year indicates the following: Revenues $765,000 Total fixed costs $91,000

The Blue Ridge Café’s budget for next year indicates the following:

Revenues $765,000

Total fixed costs $91,000

Total variable costs $512,000

Total costs ($603,000)

Net income before tax $162,000

Revenue estimate assumes 89,470 guests will be served.

1. what is the guest check average?

2. what is the variable cost per guest?

3. how many guests must be served for the Blue Ridge Cafe to break even?

4. if the wonder needs a net income of at least $114,000, how many guests would need to be served?

5. the cafe expects a 10% increase in variable costs and $8,000 in fixed costs. to maintain its current net income before tax, what will be the new guest check average (assuming the same number of guests will be served)?

Answer rating: 100% (QA)

Solution 1Calculation of the guest check average Total reveune Tot... View the full answer