The Yetmar Family Restaurant Is Open 24 Hours Per Day

Essay

The Yetmar Family Restaurant is open 24 hours per day serving breakfast, lunch, and dinner. Fixed costs are
$24,000 per month. Variable costs are estimated at $9.60 per meal. The average total bill (excluding tax and tip) is $12 per customer.
Required:
a. Compute the number of meals that must be served if the Family Restaurant wishes to earn a profit before taxes of $6,000.
b. Compute the break- even point in meals.
c. Compute the break- even volume in dollars.
d. Assume that fixed costs increase to $30,000. How many additional meals must be served if the Yetmar Family Restaurant
wishes to earn the same before- tax profit?