Problem 4 Blue Ridge Café's budget for next year indicates the to cates 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 estimates assume 89,470 guests will be served.

A. What is the guest check average?

B. What are the variable costs per guest?

C. How many guests must be served for the Blue Ridge Café to break even?

D. If the owner needed a net income of a least $114,000, how many guest would need to be served?

E. How many more guest are needed to generate a net income of $114,00, than are needed to break even?

F. If the Blue Ridge café decides to close during two months that traditionally generate slow business, it will lose about 18,000 guests. If the owner chooses to do this, what will be the new net income or loss?

G. The manager is considering a kitchen renovation that will add $7,500 in new fixed costs (depreciation and interest) each year. How much will the café net income (loss) be if it does this during the first year that it closes for two months? (See question F above)

H. The Blue Ridge Café for two months (Question F), incurs the additional fixed costs (Question G), and is the "victim" of a problem in the economy that results in a 14-precent increase in variable costs. How many additional guest are needed for it to maintain it net income level (Question G)?