Suitable options to solve the financial problem of a restaurant owner
1 answer:
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Answer:
a. 7,900
b. 10,100
Explanation:
As for the provided information,
We know at break even point taxes shall be = 0 as there are no profits and no losses.
a. At break even: =
Fixed Cost = $308,100
Contribution per unit = Selling price - Variable cost = $79 - $40 = $39
Therefore, break even units =
b. In case the company wants a profit of $51,480 after tax @ 40% then,
Earnings before taxes = = $85,800
Therefore, number of units =
= = 10,100