Question

The Asian Garden​, a local Thai​ restaurant, expects sales to be $ 285,000 in January. Its average customer restaurant bill is $ 15. Only 20 % of the restaurant bills are paid with​ cash; 60 % are paid with credit cards and 20 % with debit cards. The transaction fees charged by the credit and debit card issuers are as​ follows:Credit​ cards: $0.60 per transaction​ + 2 % of the amount chargedDebit​ cards: $0.55 per transaction​ + 1% of the amount chargedRequried:a. How much of the total sales revenue is expected to be paid in​cash?b. How many customer transactions does the company expect in​January?c. How much of the total sales revenue is expected to be paid with credit​ cards?d. How many customer transactions will be paid for by customers using credit​cards?e. When budgeting for​ January's operating​ expenses, how much should the restaurant expect to incur in credit card transaction​fees?f. How much of the total sales revenue is expected to be paid with debit​ cards?g. How many customer transactions will be paid for by customers using debit​cards?h. When budgeting for​ January's operating​ expenses, how much should the restaurant expect to incur in debit card transaction​fees?i. How much money will be deposited in the​ restaurant's bank account during the month of January related to credit and debit card​ sales? Assume the credit and debit card issuers deposit the funds on the same day the transactions occur at the restaurant​(there is no processing​ delay).j. What is the total amount of money that the restaurant expects to deposit in its bank account during the month of January from​ cash, credit​ card, and debit card​ sales? Again assume the credit and debit card issuers deposit the funds on the same day that the transaction occurs.

Answer 1

Answer:

a. How much of the total sales revenue is expected to be paid in​cash?

• $855,000

b. How many customer transactions does the company expect in​January?

• 19,000

c. How much of the total sales revenue is expected to be paid with credit​ cards?

• $171,000

d. How many customer transactions will be paid for by customers using credit​cards?

• 11,400

e. When budgeting for​ January's operating​ expenses, how much should the restaurant expect to incur in credit card transaction​fees?

• $10,260

f. How much of the total sales revenue is expected to be paid with debit​ cards?

• $57,000

g. How many customer transactions will be paid for by customers using debit​cards?

• 3,800

h. When budgeting for​ January's operating​ expenses, how much should the restaurant expect to incur in debit card transaction​fees?

• $2,660

i. How much money will be deposited in the​ restaurant's bank account during the month of January related to credit and debit card​ sales? Assume the credit and debit card issuers deposit the funds on the same day the transactions occur at the restaurant​(there is no processing​ delay).

• $215,080

j. What is the total amount of money that the restaurant expects to deposit in its bank account during the month of January from​ cash, credit​ card, and debit card​ sales? Again assume the credit and debit card issuers deposit the funds on the same day that the transaction occurs.

• $272,080

Explanation:

total sales $285,000 / $15 = 19,000 customers

• cash sales = $285,000 x 20%  = $57,000
• credit cards = $285,000 x 60%  = $171,000
• debit cards = $285,000 x 20%  = $57,000

credit card fees = (11,400 x $0.60) + ($171,000 x 2%) = $10,260

debit card fees = (3,800 x $0.55) + ($57,000 x 1%) = $2,660