The owner of the Barn Lodge restaurant estimates that fixed costs for the coming year will be $360,000. Based on his investment in the business, he wants a profit of $120,000 for the year. Experience has shown that the average check is $12.00.

a. . If total variable cost is $720,000, what level of dollar sales will be required to achieve the restaurant's target profit?
b. Given the total variable cost and total sales figures calculated in part a, what variable rate is the owner projecting?
C. Given the variable rate calculated in part b, determine the contribution rate.
d. Given the contribution rate calculated in part c, determine the average contribution margin based on an average sale of $12.00.
e. At what dollar level of sales will the restaurant break even?

Answer rating: 100% (QA)

a To achieve the restaurants target profit of 120000 we need to calculate the total sales required T... View the full answer